5 Common Mistakes Anyone Can Make with MiCA

The Markets in Crypto-Assets (MiCA) regulation shook the crypto sector of the EU in 2024 and will keep doing so in 2025. This year is pivotal for MiCA as the European countries keep transforming their local frameworks to fit the new unified system. 

Dangerously enough, many crypto entrepreneurs remain undereducated about what MiCA means for their businesses. While LegalBison has already provided some crucial info in the How to prepare your company for MiCA article, it’s not all there is to know. 

We have observed the market closely and broken down the 5 most common mistakes crypto enthusiasts make when it comes to MiCA. 

Not taking MiCA seriously

MiCA is not just a newly introduced law or an amendment to the existing framework: it is a global European regulation set to transform and revolutionize the way the crypto business is conducted. The licensing procedures of all MiCA-subject countries will soon be bound by the new regulation exclusively. 

For CASPs (Crypto-asset service providers), both new and existing, there will be a drastic change in the way they offer services to clients. Non-compliance with MiCA can result in severe monetary punishments and license revocations, up to the complete ban on getting another crypto license in the European Union. 

In our experience, faults in MiCA compliance often stem from entrepreneurs’ underestimating its importance. Business owners are given little time to prepare for the regulatory shifts and, when they prefer to do so without legal assistance, it results in a complete neglect of the most critical requirements. Therefore, at least an introductory consultation on MiCA with a lawyer must be of primary importance. 

Missing MiCA deadlines 

Shifting to MiCA is a stress factor enough for both startups and existing VASPs. For the latter, it means a notoriously long and complicated process of acquiring the CASP status, which eliminates the previous VASP from the equation. 

It doesn’t make much difference whether you register a new company or transition from VASP to CASP in the EU: the procedure is likely to be strenuous and last for months either way without proper legal assistance. 

In different MiCA jurisdictions, the so-called grandfather period will last from 6 to 18 months starting from December 30, 2024, MiCA’s enforcement date. Time flies, and with each passing day, it is gradually more difficult to prepare your business for MiCA compliance. 

An existing VASP or a startup project likely needs a thorough assessment from a lawyer. Someone has to put your company against the backdrop of MiCA and identify all the existing gaps in compliance, along with the ways to eliminate them. 

Neglecting new licensing requirements 

MiCA has introduced, among other things, a bunch of previously unseen compliance requirements. Among them is the whitepaper, which is required for anyone who wants to trade crypto assets. It must include information on the person seeking trade rights, the asset itself and its characteristics, the underlying technology, the rights and obligations related to the asset, and the environmental and other risks related to trading the asset. 

The details on the raised capital must also be included in the whitepaper, which means that you must know well in advance how much money you will need to perform trading activities and have this exact sum on your hands. 

AML-CFT and KYC compliance requirements have been also refined under MiCA. Now, your company’s internal AML-CFT compliance policies must be accompanied by exact plans for their implementation and execution. The compliance will cease to be only on paper: entrepreneurs must demonstrate that they actually enforce the policies they present to the licensing authorities. 

You cannot be too careful when it comes to fulfilling MiCA’s licensing requirements. Now that you need to have a registered EU office, provide a crypto-asset whitepaper, and demonstrate how you will execute AML-CFT compliance procedures, among other things, getting a lawyer to assist you is an unavoidable measure. 

Failing to estimate the costs 

The EU crypto licenses have always been more expensive compared to their offshore counterparts but expect a new peak in licensing fees under the influence of MiCA. This is the new reality: the costs are likely to skyrocket not only when it comes to license obtainment but also all the associated expenses, which are plenty.

Companies offering services related to asset-referenced tokens (ARTs) will have to raise significant share capital under MiCA depending on the license class: at least EUR 50,000 for Class 1, EUR 125,000 for Class 2, and EUR 150,000 for Class 3. This share capital must be deposited in a corporate bank account either in the licensing jurisdiction or any other member country of the EU. 

These expenses come along with licensing and license renewal fees, as well as legal, notary, and other administrative costs, which are plenty. Besides, don’t forget about the substantial fines MiCA imposes on non-compliant entities. 

Such a cost breakdown, which can be insurmountable, is the main reason why so many entrepreneurs refer to LegalBison for assistance in finding good alternatives to MiCA in crypto licensing. 

Licensing without a lawyer on your side 

The last and most dangerous mistake is taking on the whole MiCA preparatory process without any legal help. The new regulation has added an air of uncertainty to all crypto-related business processes in the EU. As a result, trying to secure a CASP status without a lawyer’s assistance means setting yourself up for failure. 

Whether you want a personalized consultation on MiCA compliance or are interested in alternatives, LegalBison has all the answers you need. Our main focus is to help crypto entrepreneurs secure their authorization in the most favourable legal environment.  

Give us a call or submit a form on our website so we can get back to you within 24 business hours. Get a professional lawyer to guide your company to full MiCA compliance in the designated timeframe.