Which MiCA License Class Applies to My Crypto Business?

To identify your MiCA license class, you should not look at what you want to be, but at the specific technical actions you take with client funds and data. The hierarchy is additive: higher classes usually include the permissions of the lower ones.

This guide provides a guide to help you determine whether your crypto business fall into Class 1, 2, or 3.

MiCA license types

The regulation divides Crypto-Asset Service Providers (CASPs) into three distinct tiers based on the nature of the services provided and the risks involved. You can determine your tier by asking three specific questions about your operations.

Step 1: The “trading venue” test (Class III)

The first question is whether you are operating a trading platform where multiple third-party buying and selling interests for crypto-assets can interact. This definition refers to the management of a multilateral system that brings together multiple buyers and sellers in a way that results in a contract.

If yes: You are Class III. This is the highest tier because you are responsible for the integrity of the market price and orderly trading.

• Capital requirement: 150,000 EUR
• Key indicator: You maintain an order book and match buyers with sellers directly on your infrastructure
• Regulatory focus: You must have detailed operating rules, transparent fee structures, and systems to detect market abuse

Step 2: The “control” test (Class II)

If you are not a trading platform, do you ever touch the assets or act as the counterparty in a trade? This class covers the most common “broker” and “custodian” models found in the crypto industry.

If yes: You are Class II. This tier includes services where you hold client assets or use your own capital to facilitate trades.

• Services included: Providing custody and administration of crypto-assets on behalf of clients (safekeeping keys), exchange of crypto-assets for funds (brokerage), and exchange of crypto-assets for other crypto-assets
• Capital requirement: 125,000 EUR
• Key indicator: You provide a wallet to your users or you are the one selling them the Bitcoin from your own liquidity

Step 3: The “passive service” test (Class I)

If you do not hold assets and do not match trades, are you simply a “pipeline” or a “voice” for the user? This is the entry-level tier for purely service-based businesses that do not take custody of funds.

If yes: You are Class I. This tier applies to entities that facilitate transactions or provide expertise without controlling the underlying value.

• Services included: Investment advice, portfolio management, reception and transmission of orders (RTO), and the execution of orders on behalf of clients (where you pass the order to a Class II or III entity)
• Capital requirement: 50,000 EUR
• Key indicator: You never hold the client’s private keys or their fiat funds

Must read: MiCA License Renewal Guide

Why the classification matters for your 2026 budget

Defining your class correctly is a prerequisite for your financial planning. Under Article 67 of MiCA, CASPs must maintain prudential safeguards equal to the higher of their minimum capital requirement or a portion of their overheads.

Fixed overheads

Regardless of your class, you must hold at least one quarter (25%) of your previous year’s fixed overheads in reserve. For a startup, this is calculated based on the projected fixed overheads for the first 12 months of service provision. This ensures you have a runway to wind down operations without harming clients if the business fails.

Class complexity and insurance

A Class III license requires a more robust IT audit and market abuse monitoring system than a Class I license due to the risks of operating a trading venue. Furthermore, MiCA allows CASPs to meet their prudential requirements through either own funds or an insurance policy.

If you opt for insurance, the policy must have an initial term of at least one year and include coverage for risks such as loss of documents, fraud, and business disruption. The premium for such a policy will scale significantly with your license class and the volume of assets you handle.

Cover the basics: What are the Differences Between VASP, CASP, and DASP?

Contact LegalBison today to assess your business model and confirm your MiCA license classification before you file.