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Question
What are the key requirements for CASP authorization under MiCAR?
CASP Authorization Requirements under MiCAR
The Markets in Crypto-Assets Regulation (MiCAR) establishes a comprehensive authorization framework for Crypto-Asset Service Providers (CASPs) in Title V, Articles 59-64. Any entity wishing to provide crypto-asset services within the EU must obtain authorization from the competent authority of its home Member State 1.
Core Requirements
Legal entity and establishment: The applicant must be a legal person or undertaking established in the EU, with its registered office in the Member State where it applies for authorization 2. Third-country entities cannot directly obtain a MiCAR CASP license.
Governance and fitness: Management body members must be of sufficiently good repute and possess adequate knowledge, skills, and experience. The applicant must demonstrate robust governance arrangements, including clear organisational structure, effective risk management procedures, and adequate internal control mechanisms 12.
Prudential requirements: CASPs must maintain permanent minimum own funds depending on the class of crypto-asset services provided. Under Article 67, the minimum is EUR 50,000, EUR 125,000, or EUR 150,000 depending on the service class, with the actual requirement being the higher of the fixed minimum or one quarter of fixed overheads of the preceding year 3.
Application Process
The application must include a programme of operations, a description of governance arrangements, proof of prudential safeguards, and a business continuity policy. The competent authority must assess the application within 40 working days and may request additional information, which extends the timeline 2.
Ongoing Obligations
Once authorized, CASPs must comply with ongoing conduct-of-business rules under Articles 66-73, including acting honestly, fairly, and professionally in the best interests of clients. They must maintain complaints-handling procedures and manage conflicts of interest effectively 4. ESMA maintains a public register of all authorized CASPs, which facilitates passporting across the EU.
Transitional Provisions
Member States may apply a simplified transitional regime allowing entities already authorized under national law to continue providing crypto-asset services for up to 18 months after MiCAR's application date (30 December 2024), provided they apply for full MiCAR authorization during that period 1.
A person shall not provide crypto-asset services within the Union unless that person is: (a) a legal person or other undertaking that has been authori...
An application for authorization as a crypto-asset service provider shall contain all of the following: (a) the name, including the legal name and any...
Crypto-asset service providers shall, at all times, have in place prudential safeguards equal to at least the higher of the following amounts: (a) the...
Crypto-asset service providers shall act honestly, fairly and professionally in accordance with the best interests of their clients. CASPs shall provi...
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