Crypto Assets Service Provider (CASP) License with MiCA Regulations
Whether you already operate a crypto business or only plan to launch one, be sure about one thing: navigating the fast-paced world of today’s market regulation is no longer optional; rather, it is essential. To enhance integrity in the digital asset landscape, the EU adopted the Markets in Cryptoassets Regulation (MiCA) in 2023. Under its oversight, all Virtual Asset Service Providers (VASPs) are required to obtain a Crypto-Asset Service Provider (CASP) license. That’s where we come in to guide you through every step of getting proper licensing for your venture and maintaining its compliance. From the initial assessment to getting your full CASP authorization, we are here to help you benefit from the new opportunities in the evolving crypto economy in the EU.
Contents
Understanding MiCA Regulations: Key Objectives
MiCA crypto regulation takes practical steps towards building financial integrity in today’s market. With this purpose in mind, here are the specific objectives of this regulatory structure:
- Introducing standardized rules for issuing, offering, and trading cryptoassets across the European Union.
- Ensuring investor protection through transparent mandatory disclosure by crypto service providers.
- Promoting fair market competition between cryptoasset service providers and preventing market abuse.
- Implementing anti-money laundering (AML) and counter-terrorist financing (CTF) safeguards for regulating cryptocurrencies.
- Enhancing consumer protection and trust in the rapidly evolving and often volatile cryptoasset market.
Scope of MiCA Regulations
The EU MiCA regulation applies to a wide array of crypto-related activities, including:
- Public issuance and offering of cryptoassets.
- Operation of cryptoasset trading platforms.
- Exchange services between cryptoassets and fiat currencies.
- Custodial and administrative management of crypto assets on behalf of clients.
- Order fulfillment and advisory services related to cryptoassets.
Permitted Activities
One of the things that distinguishes MiCA from other regulatory frameworks is its classification of CASPs into three main categories and distribution of permitted activities across those. Notably, the scope of activities as well as the minimum share capital requirements increase with each category. Meanwhile, here is an overview of crypto-related services your company can provide, depending on what CASP class it belongs to:
Class 1
- Proceeding with client transactions
- Positioning of crypto-assets
- Facilitating orders for others
- Client-focused crypto-asset transfers
- Overseeing the clients’ crypto-orders
- Consulting regarding handling crypto assets
- Crypto-asset portfolio management
Class 2
- All crypto-asset activities that are permitted for Class 1
- Providing custody and administration of crypto-assets on behalf of clients
- Exchange of crypto-assets against funds
- Exchange of crypto-assets against other crypto-assets
Class 3
- All crypto-asset activities specified in Class 1 and Class 2
- Trading platform for crypto-assets services
To get more details about each CASP category, you can read through Annex IV of the MiCA Regulation, the official document that outlines the requirements for CASPs and services they are authorized to provide.
CASP License Requirements
Before speaking of the CASP license requirements, make sure you know whether your company is required to hold this type of permit. Overall, this license is mandatory for all businesses within the European Union that offer services related to crypto-assets, including the following:
- Exchanging cryptocurrencies for fiat money or other crypto-assets;
- Positioning of crypto-assets;
- Crypto-asset consulting;
- Storage and management of crypto assets on behalf of clients;
- Cryptocurrency transaction advisory services;
- Making payments using crypto-assets.
Not to mention, all companies that are already authorized as VASPs (Virtual Asset Service Providers) are required to undergo a reissuance to a CASP license under the new requirements. Companies that were launched before December 30, 2024, can only continue to operate if they apply for the CASP authorization by July 31, 2025. If the application is refused or not submitted, such companies will be required to cease dealing in crypto-assets after July 1, 2026.
Mandatory Compliance Criteria
To obtain a CASP license, companies must meet the following requirements:
- Registration of a local company in one of the member states within the EU.
- CASPs must have a physical office space in the jurisdiction of their authorization. While this requirement may vary across jurisdictions, virtual offices are generally not permitted.
- Strong internal policies, including Anti-Money Laundering (AML) and Counter-Terrorist Financing (CTF) guidelines, ICT security policy, internal control and conflict of interest prevention policies, and preliminary enterprise-wide risk assessment policy.
- Assurance of data protection and cybersecurity procedures. Under MiCA, companies must enforce consistent and clear internal control policies for risk management, operational oversight, and corporate governance.
- The presence of qualified management that complies with fit and proper requirements. Namely, the key personnel must include a local AML Officer (MLRO), responsible for regulatory compliance. Keep in mind that at least one member of senior management must be a resident of your selected jurisdiction and meet the security requirements.
- Required share capital is set by the regulator, depending on the class of license. There are three categories of CASPS, depending on the scope of services they provide. The range of permitted crypto activities increases progressively with each class. Thus, the share capital is €50,000 for class 1, €125,000 for class 2, and €150,000 for class 3.
- Regular financial reporting to the regulator.
Also, keep in mind that the CASP license imposes high cryptocurrency regulatory requirements, which might be challenging for newly established companies. If your business is still at an early stage of development, you might be interested in alternative solutions for crypto licenses that offer more flexible conditions. We recommend exploring other options with more favorable and streamlined regulatory conditions:
- MSB crypto license in Canada – a perfect choice for companies providing payment services and crypto exchange operations, and prioritizing an efficient, time-saving licensing process.
- Crypto license in Switzerland – ideal for businesses seeking strong regulatory protection and a high level of credibility under the Swiss Financial Market Supervisory Authority (FINMA) supervision.
- Crypto license in El Salvador – perfect for businesses looking to benefit from clear crypto regulations, zero capital gains tax on crypto, and strong government support for blockchain innovation.
Documentation and Application Process
The process of obtaining your license under MiCA in Europe is complex and includes multiple key steps. Here is an overview of what your CASP licensing journey will look like:
- The process begins with proceeding with your initial consultation and compliance assessment. The purpose of this step is to analyze your company’s structure and its MiCA compliance, as well as to assess the necessary documentation you will need to prepare before applying for the permit. The consultation and assessment process usually takes between 2 weeks and 2 months.
- Next comes preparing the complete set of documents, according to the MiCA requirements. At this stage, you will need to form the company’s charter documents, internal policies on Anti-Money Laundering (AML), data protection, and other necessary documents, which may vary depending on the jurisdiction you aim to operate in.
- Resumes of directors and beneficiaries with proof of their qualifications.
- A program of activities describing the services the company plans to provide.
- A professional liability insurance policy.
- A description of the corporate governance structure.
- A policy on outsourcing management.
- Documentation related to IT systems and security measures.
- Confirmation of the company’s compliance with legal requirements.
- Policy on segregation of client crypto assets and funds.
- Documentation regarding relationships with subsidiary companies.
- Information on the provision of cross-border services.
- Notification of planned cross-border activities.
- Whistleblowing policy.
- The company’s pricing policy.
- Non-discriminatory commercial activities policy (for CASP classes 2 and 3).
It typically takes from 1 to 3 months to prepare a full package of documents for licensing.
- Once all documentation is prepared, you can submit your formal application to the relevant regulator for revision. Your application will be carefully examined, and the regulator may request additional information or clarification or process with the background checks, which must be provided within a specified timeframe. This step might take from a few weeks to a few months, depending on the authority processing.
The total estimated timeframe from the initial consultation to filing the CASP application is under 5 months. Yet, remember that the licensing process does not end when you receive your CASP permit. Rather, it is significant that you maintain ongoing communication with the relevant authority to ensure that your company remains fully compliant. Our legal experts will assist you through every step of obtaining your license and securing your venture’s proper authorization in the years to come.
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Benefits of Obtaining a CASP License
Securing your CASP license provides much more than just meeting legal obligations across the European Union. Rather, it gives your business official recognition under the MiCA framework, authorizing you to offer services in any EU member state without the need for additional registrations or licenses. Quick market entry, seamless scaling across borders, and less bureaucracy – these are just a few of the benefits you will enjoy with proper CASP licensing under MiCA oversight. Here is what else this permit will empower your company to achieve.
Comprehensive Legal and Compliance Documentation
Once your application is reviewed and granted a license, you will receive a set of official documentation confirming your company’s authorization to operate as a CASP under MiCA. Here is what you will get upon your licensing approval:
- First, the relevant regulator will send you an official authorization decision letter. It includes your company’s name and registration number, as well as the scope of services it’s now authorized to provide, according to the class of CASPs it belongs to. In addition, the letter contains the effective date of your license and regulatory reference number.
- You will also, of course, receive the CASP license itself. It presents a formal document certifying your business’s legal right to operate as a CASP. It includes your company’s name, license type, and the issuing authority’s signature or official seal.
- Besides the permit, you will get the license terms and conditions. In the form of an annex, it specifies the obligations your company must fulfill as a CASP under MiCA regulations and ongoing compliance requirements, including customer protection, AML policy, and reporting. It will also include information about specific restrictions or limitations for your venture if those apply.
- Also, you will receive the ESMA register listing for your company. This document confirms that your business is now added to the regulator’s public register of CASPs. The listing specifies your license number, authorized activities, the company’s name and address, and the date of authorization.
- You will also receive the access credentials for secure access to the AML supervision tools, regulatory reporting platforms, and notification systems for cross-border activities.
- Finally, the document package will contain the ongoing reporting timelines and guidelines. This document will specify the instructions for keeping your company compliant with MiCA and guidelines for reporting to the National Competent Authority (NCA) in your jurisdiction.
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Navigating MiCA Compliance with Fintech Harbor
The lawyer team at Fintech Harbor brings in-depth expertise in MiCA legislation and the nuances of the complex cryptocurrency landscape in the EU. We stay ahead of the latest developments in legislation, ensuring that your company remains fully supported through the entire licensing process and stays compliant as regulatory requirements evolve.
Tailored Solutions for Crypto Businesses
At Fintech Harbor Consulting LTD, we acknowledge that no two crypto businesses are the same. Therefore, we provide personalized solutions tailored to meet your specific operational goals, from legal advice to assistance in your CASP license preparation and application.
Ongoing Compliance Support
Ensuring that your company remains compliant with the AML and KYC procedures is key when it comes to fulfilling the current MiCA regulations as a CASP. Our services don’t end with obtaining a license. Once you get your CASP authorization for your venture, we will provide ongoing compliance support to keep your business aligned with the most accurate MiCA regulatory requirements. In particular, our ongoing assistance includes conducting internal audits, preparing regulatory reports, and ensuring your venture’s compliance over time.
Why Choose Fintech Harbor for Your CASP License Needs?
Navigating the fast-paced and constantly evolving crypto landscape can indeed be challenging, but one thing is certain: we are here to provide end-to-end support with your licensing journey and make it as clear, successful, and smooth as possible. From initial compliance assessment and consultation to the final approval of your application, our experienced lawyer team will walk you through every step of the process. With our hands-on management and expert legal advice, we tailor our approach to your specific business goals and the license requirements of your selected jurisdiction. Here is what you will get as you partner with us:
Comprehensive Licensing Services
Fintech Harbor offers a full range of services for obtaining a CASP license, including legal advice, document preparation, and interaction with regulators at all stages of the application process. Whether you are looking to obtain a crypto license in Poland, the Czech Republic, or another EU Member State, our expert team will thoughtfully assist you in securing your license quickly and efficiently.
Streamlined Application Process
We will take care of every detail of your application journey, including preparing all the paperwork and coordinating the interaction with the regulator, minimizing the processing time. Our specialists will keep you updated about every compliance requirement and procedure to reduce the revision time and guarantee the success of your application.
Post-License Support
With our commitment to your success, we will continue to support your venture even after you hold your license. In particular, we offer ongoing, thorough assistance with reporting, compliance monitoring, and adapting to new regulatory requirements. This way, you can be sure that your business remains fully compliant and secure in the years to come.
Common Challenges in MiCA Licensing
As you already know, the unified MiCA framework unlocks new opportunities for your company’s scalable growth within the EU. However, these benefits come with the complexities of maintaining your license and navigating the regulatory obligations. Here are the most common challenges businesses face in today’s crypto-license landscape and effective solutions to them.
Regulatory Hurdles and How to Overcome Them
One of the major challenges in obtaining a CASP license is meeting the strict standards and regulations set by MiCA. Namely, to get their application approved, businesses must comply with AML/CTF policies, data protection, and corporate governance requirements. They must also demonstrate adequate IT security controls, operational continuity planning, and clear internal governance structures in line with Article 62 MiCA. For successful licensing, it is important to proactively develop a detailed compliance strategy and cooperate with legal advisors who specialize in the EU crypto regulation. Early planning and our expert guidance will turn regulatory barriers into milestones on your licensing journey.
Pitfalls in the Application Process
The application process involves the preparation of a large amount of documentation, from a comprehensive business plan and internal policies to documents supporting the company’s organizational structure. The most common issues at this step are incomplete application packages, incorrect information, or a lack of explanatory material. A solution is simple yet essential: thorough pre-filing review and maintaining clear and open communication with the regulator through the whole process. Failure to respond to regulator inquiries or delays in providing supplemental documentation can also lead to rejections or restarts. It will prevent the possibility of your application’s delay or rejection due to document-related mistakes.
Ensuring Long-Term Compliance
Obtaining your CASP license is just the first step.MiCA standards require companies to maintain compliance throughout the validity of the license. This includes regular reporting, internal audits, and updating AML/CTF policies in line with changes in legislation. CASPs are also expected to notify competent authorities of changes in operations, key staff, or outsourcing arrangements in a timely manner. Keep in mind that staying compliant in the long-term run demands strategic support. Therefore, partnering with compliance professionals will help your business’s operations stay aligned with the EU requirements, which will, as a result, prevent fines and build trust.
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FAQ
What is the scope of MiCA in regulating crypto assets?
MiCA regulates the issuance, offering, and trading of cryptoassets within the EU. The regulation applies to crypto asset service providers (CASPs) providing the following range of services:
- Issuance and offering of cryptoassets
- Cryptoasset trading platforms’ operation
- Exchange between cryptoassets and fiat currencies
- Administrative and custodial management of crypto assets on behalf of clients
- Order fulfillment and advisory services related to cryptoassets.
How does the CASP license benefit crypto businesses in the EU?
A CASP license gives companies legal recognition in the EU, increases trust from customers and partners, and allows them to offer services in any EU member state without additional permits. Streamlined expansion in the market, new growth opportunities, and ensured security are just a few of the advantages you get with your CASP license under MiCA. Moreover, with our ongoing compliance support after you obtain your permit, you will secure your company’s legal authorization for the future and secure its place in today’s evolving crypto ecosystem.
What are the key steps in obtaining a CASP license?
The process of securing your CASP license under the new MiCA oversight is complex and involves several key steps. It starts with the initial consultation with our legal professionals and assessing your company’s compliance. Then, you will need to prepare the complete set of corporate documents, develop internal policies, and submit an application to the regulator for review. Also, make sure to stay in touch with the regulator in case of additional requests, and follow up on regulatory compliance. Finally, once your application is approved, you will officially receive your permit as well as the other official legal documents confirming your company’s authorization as a CASP. The entire process of obtaining your permit typically takes up to 5 months.
However, the licensing process does not end at this stage. Make sure to keep your business compliant with the EU standards throughout the entire duration of your permit’s validity. Our legal experts will guide you through every step of this important process as well as assist you in keeping up with any regulatory changes in today’s crypto market’s legislation.
