With MiCA’s full implementation on the horizon, ReadyCorp clarifies key compliance obligations during the transitional period for EU Crypto-Asset Service Providers (CASPs).

As the December 30 deadline for MiCA (Markets in Crypto-Assets) approaches, CASPs across the European Union are seeking clarity about what the transitional period entails. While the grandfathering provisions offer some flexibility, there are critical compliance obligations that remain unchanged.

AML and the Travel Rule: Non-Negotiable Compliance Requirements

A key misconception among CASPs is that anti-money laundering (AML) requirements and the Travel Rule may be relaxed during the transitional period. Let’s set the record straight: that’s not the case. Existing CASPs are already bound by EU AML rules, and the transitional period does not exempt them from continuing to comply.

The European Banking Authority (EBA) has reaffirmed that all CASPs must have robust measures to mitigate money laundering and terrorism financing risks. This includes developing risk assessments, internal policies, and controls aligned with EU standards. Additionally, CASPs must comply with the EU Transfer of Funds Regulation, ensuring traceability by providing details about the originator and beneficiary of crypto-asset transfers. These rules apply even to transfers involving self-hosted wallets, underscoring the importance of ongoing compliance.

Dispelling Common MiCA Myths

1. "Everything starts on December 30"
   Not exactly. While MiCA takes effect, existing CASPs operating under national regulations may receive up to 18 months to transition. However, timelines differ by country, and some nations, like Ireland, only offer a 12-month extension.
2. "We have an extra 18 months"
   This is not guaranteed. The 18-month extension isn't obligatory, and each Member State determines its duration. For CASPs, understanding their country’s specific timeline is critical. Click HERE to find a detailed list issued by the ESMA.
3. "I can offer services throughout the EU during the transition"
   No. Passporting rights under MiCA do not apply during the transitional period. CASPs can only operate within the country where they are registered until full MiCA authorization is granted.
4.  "The transition period applies for all CASPs”
   No. The transition only applies to existing CASPs or other financial firms that were already authorized under that state's rules. New CASPs entering the market after December 30, 2024 must immediately comply with MiCA.
5. "AML compliance is unnecessary during the transition"
   Completely false. AML/CFT rules remain in full force, and CASPs must adhere to these regulations. This includes transaction monitoring, risk management, and compliance with EBA Guidelines.
6. "The Travel Rule doesn’t apply"
   Incorrect. The Travel Rule is a critical compliance requirement under the EU Transfer of Funds Regulation and applies throughout the transitional period. CASPs must ensure transparency in crypto-asset transfers to meet these obligations.

Prepare Now to Stay Compliant

As MiCA reshapes the crypto regulatory landscape, CASPs must act proactively to ensure seamless compliance during the transitional period. ReadyCorp is here to assist with expert guidance on AML/CFT adherence, the Travel Rule, and navigating MiCA-specific authorisation processes. While the transition provides time to adjust, it’s essential to act now to secure a compliant and competitive position in the EU market.

For more information or to schedule a consultation, visit www.readycorp.co