MiCA (Markets in Crypto-Assets) regulation provides a unified licensing regime for the entire European Union. Crypto businesses, which are currently classified as VASPs (Virtual Asset Service Providers), will soon be classified as CASPs (Crypto-Asset Service Providers) under new MiCA regulations.

The opening of MiCA license application submissions is January 1st 2025. Every company holding a VASP license must re-apply for a new MiCA CASP license. VASPs will have a transition period (length depending on jurisdiction), but as the timeframes are quite narrow we recommend starting preparations now. ReadyCorp will get you started by drafting the required policy documentation and start setting up a local entity, such as a physical office and a local team of senior level AML specialists.

A CASP license is passport-able and it covers operations in any EU country (like an EMI license). The first set of regulations took effect on June 30th 2024 for stablecoin issuers and the second set takes effect on December 30th 2024 for crypto exchanges. We have strong connections with local regulators who will now be handling MiCA CASP licenses, and we are well aligned to navigate current VASPs to comply with European MiCA CASP license requirements.

MiCA has arrived. The EU Member States have the option of granting currently licensed VASPs up to an additional 18-month “transitional period” during which they may continue to operate without a MiCA license (“grand-fathering clause”). Thus the current VASPs may potentially operate until as late as 1st July 2026 – the exact date however may vary by jurisdiction based on how each Member State chooses to apply (or not apply) the optional transitional measures per Article 143(3) of MiCA. 

*However: Cross-border activities by an entity benefiting from grand­-fathering may occur only if the entity complies with relevant legislation applicable in both the home and host Member States. The provision of crypto-asset services during the transitional period should in any case always comply with the applicable national laws in the Member State where the services are provided. Entities benefiting from grand-fathering will be forbidden from conducting cross-border activities in Member States where the grandfathering clause is not (or no Ionger) applicable. 

MiCA license application foresees submitting an application to the regulator who has up to 25 business days to assess whether the application is complete (if not, a deadline is provided). The regulator will assess, within 3 months, if the CASP license applicant complies with the requirements and provides a reasoned decision – the applicant will be notified within 3 business days of the decision.

To ensure a smooth transition, current VASPs should use the requirements of MiCA regulation as a blueprint to adjust towards the upcoming regulatory regime. Important changes from VASP to MiCA CASP license application:

Capital Requirements*: Heightened capital requirements (of up to €150k) are set to ensure financial service stability, to protect customer rights and to offer a threshold for entering the market. Must have at least one bank account opened at a EU based credit institution (EMI bank account does not qualify).

AML Compliance & Internal Policies: A set of internal policies required by MiCA have to be established for internal control mechanisms, risk assessment, confidentiality and safeguarding of funds.

Local Entity: A physical office where at least part of the activities are carried out; management taking place in the EU with at least one director being a resident of the EU, and senior level local AML compliance specialists (e.g. CCO, CRO and MLRO roles). The expectations of the legislator and regulator differ per jurisdiction.

*Capital Requirements

Class 1 CASP – 50.000 EUR capital for the following crypto-asset services:
– reception and transmission of orders on behalf of third parties; and/or
– providing advice on crypto-assets; and/or
– execution of orders on behalf of third parties; and/or
– placing of crypto-assets.

Class 2 CASP – 125.000 EUR capital for the following crypto-asset services:

– reception and transmission of orders on behalf of third parties; and/or
– providing advice on crypto-assets; and/or
– execution of orders on behalf of third parties; and/or
– placing of crypto-assets.

– exchange of crypto-assets for fiat currency that is legal tender;
– exchange of crypto-assets for other crypto-assets;
– operation of a trading platform for crypto-assets.

Class 3 CASP – 150.000 EUR capital for the following crypto-asset services:

– reception and transmission of orders on behalf of third parties; and/or
– providing advice on crypto-assets; and/or
– execution of orders on behalf of third parties; and/or
– placing of crypto-assets.

– exchange of crypto-assets for fiat currency that is legal tender;
– exchange of crypto-assets for other crypto-assets;
– operation of a trading platform for crypto-assets.
– custody and administration of crypto-assets on behalf of third parties.