Key Documents for CASP License Process Under MiCA Regulation

Key Documents for CASP License Under MiCA Regulation

The European Union’s Markets in Crypto-Assets (MiCA) regulation represents a significant step forward in the regulatory landscape for crypto-assets. It focuses on consumer protection, anti-money laundering, and the financial system’s stability. Understanding the intricacies of MiCA is essential for Crypto-Asset Service Providers (CASPs) operating in the EU.

MiCA and Its Implications for CASPs

MiCA provides:

  • A harmonized regulatory framework for crypto-assets.
  • Different licensing (authorization) process for CASPs
  • General compliance requirements (funds safeguarding, outsourcing, audits, etc.)

This regulation impacts all EU member states and applies to firms seeking business within the EU, including those from third countries. The European Commission developed MiCA to ensure safe access to innovative crypto-assets for EU consumers without compromising market stability​​​​.

Essential Regulatory Requirements for CASPs

Crypto-Asset Services Covered by MiCA:

  • Custody and Administration of Crypto-Assets refers to services where a company takes care of your crypto-assets. They keep them safe and manage them on your behalf.
  • Operating a Trading Platform for Crypto-Assets: involves running an online platform where people can buy, sell, or trade crypto-assets like Bitcoin or Ethereum.
  • Exchange Services: service allows you to swap your crypto-assets for regular money (like euros or dollars) or exchange one type of crypto-asset for another.
  • Advisory Services: company provides expert advice on matters related to crypto-assets, like which ones might be good to invest in.

Capital Requirements for CASPs:

  • Depending on the type of service a CASP offers, they need to have a certain amount of money set aside. It is like a safety net to ensure the company is stable and can handle its responsibilities properly.
  • The amount of this safety net (capital) varies:
    • If a company provides essential services like crypto-asset advice, they need at least EUR 50,000.
    • For more complex services, like running a trading platform, this requirement could be as high as EUR 150,000.

The idea behind these requirements is to ensure that companies dealing with crypto-assets are responsible and have enough financial backing to operate safely and reliably. It is part of the EU’s effort to protect consumers and maintain stability in the crypto-asset market. By setting these standards, MiCA aims to create a safer and more trustworthy environment for people who use and invest in crypto-assets.

Who Does MiCA Apply To? Casting a Wide Regulatory Net Across Europe
Who Does MiCA Apply To

The EU has introduced new MiCA rules to regulate crypto companies starting June 29, 2023.

MiCA aims to oversee all crypto-asset service providers (CASPs) operating within Europe. It includes:

  • Exchanges
  • Wallet providers
  • Investment advisors
  • Brokers
  • Any business providing services around crypto-assets

Companies located outside the EU are also included if they serve EU-based customers.

Overall, MiCA’s scope is far-reaching. It will apply to most types of crypto-asset services in the EU market.

MiCA also sets standards for stablecoin issuers and other asset-referenced tokens.

In summary, MiCA casts a wide regulatory net to provide oversight across the crypto ecosystem in Europe. Local and foreign companies offering crypto services or assets to EU users must comply.

There are two paths crypto businesses can take under MiCA:

  1. Become an “Authorized CASP”: Register your crypto company as a European legal entity. Then, apply for a new MiCA license. It is required for pure crypto firms.
  2. Operate as an “Authorized Financial Institution”: If already licensed as a bank, payment company, etc., you can provide part of crypto services under your existing license.

A MiCA license will enable crypto companies to access the entire EU market. Financial groups can leverage their current licenses. But standalone crypto firms must apply for EU authorization under the new MiCA framework.

Licensing Up: What CASPs Must Do to Operate Under MICA

For CASPs, the core obligation is clear – you’ll need to obtain a license from regulators in an EU country to offer services.

This license will enable passporting rights, so once approved in one member state, your business can provide the same services across the EU without added licensing.

However, securing the license is a challenging feat. EU regulators will assess applicants against rigorous standards around governance, capital, infrastructure, internal compliance, anti-money laundering (AML), and other areas.

What exactly will CASPs need to do to get MICA approved? Here are the essential prerequisites:

  • Have an office location and director within the EU.
  • Meet minimum capital requirements.
  • Have systems for KYC, record-keeping, and monitoring to prevent illicit activities
  • Ensure secure custody of client assets and funds.
  • Implement mechanisms for complaints handling, conflicts of interest management, outsourcing oversight, and business continuity.

Additionally, CASPs must submit detailed paperwork covering their services, systems, policies, and structures. Regulators will thoroughly review applications before granting licenses.


Get Free Consultation on Company Formation, Fintech &
Crypto Licensing, AML/CTF Compliance, Business Advisory &
Banking Solutions!

Get in Touch


Navigating the License Application Process Across Europe

To get their license, CASPs must apply to the relevant national regulator in an EU country where they maintain an office and directorship.

The process will involve:

  • Submitting prescribed information about the applicant’s services, governance, resources, policies, and more. Regulators may request clarifications or additional details.
  • Assessment of the application by the regulator against MICA’s authorization conditions and timelines. It may span around 3 months.
  • Receiving a final approval – or refusal – from the regulator. Approved CASPs can offer passport able services across the EU.
  • Ongoing supervision by the regulator to ensure the CASP’s compliance with MICA’s obligations. Regulators can penalize breaches.

The application process promises to be rigorous and in-depth. By meeting these enhanced standards, regulators aim to boost the crypto sector’s maturity and stability across the EU.

Gearing Up for MICA: Key Timelines for Crypto Players

With MICA set to profoundly reshape its operating landscape, crypto players across Europe strategize to align with the new paradigm. Here are the critical dates for industry members to track:

  • MICA was adopted by the EU parliament and council in 2022.
  • It will start applying from early 2024, 18 months after final approval.
  • EU countries have until early 2023 to enshrine MICA into national laws and establish regulatory frameworks.
  • Existing CASPs have 12 months from implementation to submit license applications. New applicants have 18 months.

As the milestone dates draw closer, CASPs operating in the EU must act swiftly to comprehend requirements, configure systems, and engage with regulators to prepare license applications.

How MiCA Will Impact Crypto Companies in Europe

MiCA is a new EU regulation for crypto companies. Here is how it will impact crypto businesses:

For Crypto Companies Outside the EU

  • MiCA gives clear rules for crypto companies outside the EU that want to operate in Europe. It helps them understand what is required.
  • These companies need to open a representative office in a European country. It makes them more accessible to EU regulators.
  • They must meet capital requirements based on their services. It ensures they have enough funds to operate safely.

For Companies Issuing Asset-Referenced Tokens

  • Tokens like stablecoins must have reserves of assets to back their value. It reduces risks.
  • Issuers must follow financial security rules on things like capital. It keeps their business financially stable.
  • For example, crypto companies in Cyprus already meet MiCA’s requirements. Some EU countries are already adapting to MiCA.

For Environmental Impact

  • MiCA promotes environmentally friendly crypto technology. It aligns with EU climate goals.
  • Crypto companies must disclose details on their environmental impact and energy use. It encourages sustainable practices.

General documents required for the application process of CASP

  • Program of Operations: Outline the crypto-asset services offered (e.g., storage, trading, exchange).
  • Governance Arrangements: Detail your company’s structure, roles, decision-making, and oversight.
  • Critical Personnel Questionnaires: Fill out for the Board, CEO, Shareholders, and UBOs with background and suitability info.
  • Internal Control Mechanism: Describe financial and operational risk management policies and procedures.
  • Risk Assessment Procedure: Explain your methods for identifying and mitigating operational risks.
  • Business Continuity Plan: Provide a strategy for maintaining operations during disruptions.
  • IT Security Details: Offer technical and straightforward explanations of IT systems and crypto-asset security measures.
  • Prudential Safeguards: Show evidence of meeting capital requirements and financial stability.
  • Complaints Procedure: Outline how client complaints are handled efficiently and fairly.
  • Asset Segregation Protocol: Explain the separation and security of client assets from company assets.
  • Market Abuse Detection System: Describe systems to prevent market manipulation and insider trading.
  • Custody Policy: If offering custody, detail the security and management of client crypto-assets.
  • Trading Platform Rules: If running a trading platform, define rules for market fairness.
  • Commercial Policy: State your pricing and exchange policies if exchanging crypto.
  • Execution Policy: If executing orders, describe your process for best execution.
  • Advisor Qualifications: If giving advice, show that advisors are qualified and knowledgeable.

Overall, MiCA represents an opportunity for legitimate crypto businesses to establish their reputation and expand into the EU market.


Obtaining a MiCA license represents a significant milestone for crypto-asset service providers (CASPs) seeking to operate compliantly across the EU. The licensing process requires submitting detailed applications to national regulators, demonstrating compliance with governance, capital, infrastructure, and anti-money laundering controls requirements. While rigorous, attaining a MiCA license enables critical passporting rights for approved CASPs to provide authorized services throughout Europe’s unified market.

With MiCA’s implementation timeline now in effect, crypto businesses must diligently prepare license applications, align internal systems and policies with regulatory expectations, and collaborate closely with oversight bodies.