The Markets in Crypto-Assets Regulation, Regulation (EU) 2023/1114 (“MiCA”), has applied to crypto-asset service providers throughout the European Union since 30 December 2024.
The former national VASP registration regimes were subject to transitional arrangements only, which ended no later than 1 July 2026. Businesses providing regulated crypto-asset services from the EU must therefore assess whether a MiCA authorisation as a Crypto-Asset Service Provider (“CASP”) is required for their proposed activity.
A CASP authorised in one EU Member State may provide its approved services in other Member States through the MiCA passporting process. The authorisation is granted for specific services, not for crypto activity generally.
MiCA may apply to businesses providing services such as:
The appropriate scope should be determined at the outset. Adding a new regulated service after authorisation may require an extension of the authorisation.
The minimum prudential requirement depends on the services to be provided:
The company must maintain prudential safeguards on an ongoing basis. These must equal the higher of the relevant MiCA threshold or one quarter of the company’s fixed annual overheads.
The structure of the capital and prudential arrangements, including paid-up share capital, own funds and, where permitted, professional indemnity insurance, should be considered in light of the selected jurisdiction and business model.
The applicant must be an EU-established entity, with its registered office and effective place of management in the Member State where it seeks authorisation. At least one director must be resident in the EU.
The regulator will expect a genuine local presence. The required level of substance will vary according to the services, scale of the activity and use of external providers, but a registered office alone will not be sufficient. The company must be able to show that management decisions, compliance oversight and key operational functions are properly controlled from within the EU.
The ownership structure will be reviewed in detail. This includes the shareholders, ultimate beneficial owners, group entities and the source of funds used to establish and finance the business.
Directors and senior managers must be able to demonstrate appropriate experience, good repute and sufficient availability. The application must also set out who is responsible for compliance, risk management, AML/CFT, technology oversight and the day-to-day management of the business.
The application must give the regulator a clear picture of how the company will operate. It will normally include:
The competent authority has up to 25 working days to assess whether an application is complete. Once the application is complete, the authority has up to 40 working days to issue a decision. The overall process may take longer where further information, restructuring or additional supporting documentation is required.
The company must have procedures that reflect the services it intends to provide. These will generally include AML/CFT and sanctions controls, customer due diligence, transaction monitoring, Travel Rule procedures, suspicious activity reporting, complaints handling, record keeping, conflicts of interest management and outsourcing oversight.
The applicant must also maintain appropriate ICT security, cyber-risk controls, business continuity arrangements and incident-management procedures.
Where the business holds client crypto-assets, additional arrangements will be required for wallet security, private key management, custody controls, safeguarding and segregation of client assets.
MiCA authorisation carries continuing obligations. The CASP must maintain its capital, local substance, management and compliance arrangements, and must keep the competent authority informed of material changes.
Changes to ownership, directors, business model, regulated services, outsourcing arrangements or financial position should be assessed before implementation.
ClearSky assists clients with the full MiCA process, from the initial assessment of the business model and jurisdiction selection through to company structuring, capital and local substance planning, application preparation and implementation of the required compliance framework.
Contact our team to discuss the MiCA authorisation route suitable for your business.
