Managed DeFi Yield Provider Tesseract Secures MiCA License

Crypto asset management firm Tesseract has secured a Markets in Crypto-Assets regulation (MiCA) license from Finland’s Financial Supervisory Authority, offering EU investors regulated, managed yield-generating services via DeFi protocols.

Tesseract’s MiCA license allows the Helsinki-based firm to offer portfolio management, custody, and asset transfers for both retail and institutional investors, according to a press release shared with The Defiant.

Regarding investment thresholds, Tesseract Group CEO James Harris said in commentary for The Defiant that there is no minimum for retail users. For corporate treasuries, starting deposits typically begin around $1 million. The firm says that the license makes it the first regulated European entity “to offer services that generate yield via active portfolio management across DeFi protocols.”

According to its website, Tesseract has over $500 million in assets under management and has provided $20 million in yield across fifteen crypto assets.

Mix of Strategies

Tesseract’s Managed DeFi product spreads investments across yield farming, lending, staking, liquidity provision, and arbitrage on vetted DeFi protocols, while the team adjusts allocations to manage risk and respond to changing market conditions.

When asked how Tesseract decides which DeFi protocols or strategies to include in its Managed DeFi portfolio, Harris didn’t provide a detailed explanation, saying only that the firm maintains a risk management framework.

“We maintain a rigorous portfolio and risk management framework, and actively monitor asset allocations and market events. Our Managed DeFi products use an actively managed, diverse mix of strategies all aimed at optimising risk-reward ratios with a high level of transparency,” Harris said.

Navigating Through Ambiguity

MiCA, the EU’s sweeping regulatory framework for crypto, fully came into effect in December 2024, and sets EU-wide requirements and regulatory clarity for crypto firms, or crypto asset service providers (CASPs) operating in the region.

Tether decided not to pursue MiCA compliance as yet — which would require restrictions such as holding reserves in European banks — leading to EU-regulated platforms delisting USDT, by far the largest and most popular stablecoin globally. Other firms, however, have developed MiCA-compliant products, like the EURØP stablecoin, though its adoption still lags behind U.S. dollar-backed rivals.

MiCA and DeFi

While MiCA primarily regulates centralized entities, its application to DeFi is less clear. The regulation excludes services “provided in a fully decentralised manner without any intermediary,” but the definition of “fully decentralized” remains ambiguous. As MakerDAO co-founder Rune Christensen suggested in an X post in April 2024, only “fully decentralized, local, downloaded frontends or full-KYC online frontends would be possible” under MiCA.

Indeed, Tesseract notes that it adheres to “strict AML/KYC compliance” and its managed yield-generating product is closer to a centralized exchange than a strictly DeFi-native platform.

On managing smart contract and counterparty risk, Tesseract’s Harris explained that the firm has invested in institutional-grade compliance and risk management, including CASP registration and ISO27001/SOC2 certifications, which are international standards showing that a company has solid controls for protecting sensitive information and managing customer data.

He highlighted that Tesseract protects client assets through thorough credit due diligence, collateral requirements based on borrower ratings, and by placing funds in fully separate legal entities so each client’s holdings are isolated from the firm’s balance sheet and other clients. On the DeFi side, the team “designs and monitors allocations, runs stress tests and dashboards, and provides transparent monthly reporting and attestations.”

Founded in 2018, Tesseract raised $25 million in Series A funding round in 2021, led by Augmentum Fintech, and with participation from Coinbase Ventures, Wintermute, and Woorton, among others.

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