Dedicated Legal Assistance for MiCA Regulation and Compliance
The new MiCA regulation is currently being deployed in the European Union. What does this framework entail? What will be the consequences for your business? How can you prepare your business for the MiCA enforcement? Is it worth getting a MiCA license?
Let this page be your MiCA guidebook, prepared by professional blockchain lawyers from LegalBison.
Background of the MiCA Regulation
The MiCA regulation is the new unified set of rules prepared by the EU to manage and control the use and spread of crypto assets across all its Member States. The main objective of MiCA is to regulate all crypto-related businesses that fall into its scope according to one clearly defined rulebook. Here is what crypto business owners can expect from MiCA once it comes into force.
History of the MiCA Regulation
It is not an understatement to say that MiCA as we know it now roots back to the first successful regulation of crypto assets in the EU which took place in 2017 in Estonia. The very first variant of the framework practically gave free rein to crypto companies, allowing them to operate 100% remotely as long as they complied with AML-CFT. However, it went through significant amendments in 2020 and 2022, first imposing an obligatory rule of having an economic substance in Estonia and then increasing the minimum required share capital.
At the same time, the first workings of the unified European regulation of crypto were initiated by the European Securities and Markets Authority (ESMA) in 2019, with the Estonian crypto license and the French DASP framework being the primary sources of inspiration for the future framework. Thus, MiCA had been in the works from 2019 through 2023, when the final version of the regulation was introduced in April. Following the support of the absolute majority in the European Parliament, MiCA entered into force in June and will be enforced gradually until full adoption in the whole Union.
The philosophy and goals of the MiCA Regulation
The purpose of MiCA is to put the European regulations of the crypto assets in line with the current digital age, which would create a more streamlined and transparent procedure for registering new crypto-related companies and business models, as well as enable new employment opportunities for EU citizens.
Similarly to payment institutions and EMIs, MiCAR introduced the passporting of crypto licenses, meaning that by obtaining a license in one EU country, a company can then provide services in another or all other EU countries without needing any extra licenses.
In addition, MiCA aims to protect the customers from possible risks associated with the crypto asset market, including those applications of the distributed ledger technology (DLT) and blockchain technology that have not yet been studied in full, which will allow the new and emerging business models operate in full legality, transparency, and stability. In essence, MiCA will secure the existing and newly introduced crypto business models in such a way that will harmoniously unite innovation with legality and stability.
Calendar of enforcement of the Regulation
According to the regulation, the first preparatory block for the enforcement of MiCA was finished by 30 June 2024. On this date, the first leg of MiCA officially changed the classification of crypto assets in the EU, including the ones previously known as “stablecoins”. Since 30 June 2024, all crypto assets have been divided into three classes: asset-referenced tokens, e-money tokens, and other token types.
The established deadline on which MiCA will enter full force, replacing all the previous European regulations, is 30 December 2024. By this date, all crypto businesses and issuers of crypto assets that fall under the scope of MiCA must align their activities and compliance procedures with the new regulatory requirements. Legal entities previously deemed as VASPs will qualify as CASPs under MiCA starting 30 December 2024 as long as they meet this deadline.
LegalBison closely observes the timeline of MiCA implementation across the EU and assists European clients in preparing their businesses for the new regulation. With the support of certified lawyers, future CASPs and CAs will be able to meet all the requirements before the official enforcement of MiCA.
The new status of Crypto Asset Service Provider (CASP)
The term Crypto Asset Service Provider (CASP) replaces the well-known Virtual Asset Service Provider (VASP) under MiCA. This new CASP status will refer to all companies offering crypto-related services, such as exchanges, trading platforms, wallets, portfolio managers, and crypto advisors. All the EU licenses previously known as VASP licenses (authorizations, registrations), will be from now on known as CASP licenses.
The need for new terminology was invoked by the wider scope of products and services covered by MiCA, the ones previously excluded from European regulations.
A new asset class: Asset-Referenced Tokens (ART)
Asset-Referenced Tokens (ART) are one of the three crypto asset classes as defined by the MiCA regulation, along with E-Money Tokens (EMT) and crypto assets that are neither ART nor EMT.
In short: ART are cryptocurrencies whose value derives from:
- A single value or right;
- A combination of values, rights and/or currencies;
- Two or more official currencies.
This nomenclature includes part of what was previously called ‘stablecoins’, notably algorithmic stablecoins such as MakerDAO’s DAI.
Issuing an asset-referenced token requires authorization from the competent authority of the European member state where the company is registered and regulated. The authorization is provided upon an application process that is mostly similar for all crypto asset issuers (ART, EMT, or else) and for crypto asset service providers (CASP) in Europe.
To legally issue an asset-referenced token, a crypto asset issuer must fulfill the own funds and reserve assets conditions, in order to ensure that the token is safe for users to use. Article 35 for example details the minimum own funds (company capital) required being 350,000 EUR or more, depending on the highest of three possible calculations. This number may increase to up to 20% by competent authorities, depending on the risk profile of the issuer. In summary, 350,000 EUR is the lowest, not-guaranteed, sum to be deposited.
Regarding reserve assets, Article 36 details the proper custody and management of the assets backing an ART. Most importantly, they should be detained in segregated accounts from the company’s, and in an amount to be agreed with the regulator. Note that reserve assets can be invested under certain conditions detailed in Article 38.
After successfully issuing an ART, the issuer may be obligated to report every quarter to its domestic regulatory authority regarding the number of holders, their value, and the data pertaining to transactions. This obligation is true for every ART whose market capitalization exceeds 100 M EUR, but the MiCA regulation in Article 22.2 states that the competent authority can rightfully enforce such reporting requirements on any ART issuer.
A new asset class: E-Money Tokens (EMT)
Electronic Money Token (EMT) is one of the three classes of crypto assets as defined by the MICA regulation. As the name implies, Electronic Money Tokens are relevant to Electronic Money laws and therefore lay into the scope of Electronic Money Institutions. Such a license is therefore required to issue EMTs, and the operation of such a licensed entity (EMI or credit institution, as per Directive 2009/110/EC) may overrule the need for registration as a CASP under the MiCA regulation.
E-Money Tokens are what comes to the mind of most people when we speak about stablecoins: a digital asset whose value derives from a single official currency. This is the case of Circle’s USDC and Tether’s USDT. Circle subsequently registered as an Electronic Money Institution in France, while Tether’s USDT is the object of debate in Europe.
The procedure to issue EMTs under MiCA requires fulfilling first a certain number of requirements:
- Authorized as an EMI or credit institution within the EU, as per Article 48.1.(a);
- A complete whitepaper, compliant with Article 51 and Annex III of the Regulation;
- Notify and inform the regulatory authority at least 40 days before issuance (Article 48.6);
- Issue the EMT at par value and on the receipt of funds (Article 49.3).
As for ART, the issuers of EMT may be obligated as well to report quarterly to its competent authorities of registration, regarding the number of holders, their value, and the data pertaining to transactions.
Other assets not falling under the jurisdiction of ART and EMT
Simply put: if a crypto asset does not qualify as an asset-referenced token (ART) nor an e-money token (EMT), it then falls into the general category of “crypto-assets other than asset-referenced tokens or e-money tokens”.
Far from being a leftover category, emitting such a cryptocurrency also requires the drafting of a whitepaper answering to certain criteria defined by Article 6 of the Regulation, and further requirements established within the Annex I.
The Regulation further provides guidance on proper marketing promotion and issuance conditions of the token.
Security tokens under MiCA
Financial instruments as defined in the Directive 2014/65/EU, no matter if they are a cryptocurrency or a token on a blockchain or else, do not fall under the scope of MiCA, as per Recital 3 of the MiCA regulation.
Issuers of such crypto assets will be liable to comply with the relevant laws and regulations in the issuer’s registration country and applicable European texts.
A legal opinion is necessary to ensure the proper qualification of a crypto asset as not being a security or financial instrument. Elseway, an unregulated security token shall expose the issuer to sanctions way over the scope of MiCA.
As the European Securities and Markets Authority (ESMA) published a statement warning domestic regulators against global firms (corporate groups with financial licenses outside of the European Union), we strongly recommend asking for legal consultation on the matter of your project, if you intend to issue financial instruments such as crypto derivatives or security tokens for your project. The corporate structure will significantly decide the legality of your project.
Exemptions under MiCA
A few business models related to crypto assets are explicitly exempted from compliance with the MiCA regulation. These business models are duly defined by the Regulation.
Notable cases of exemptions include:
- NFTs who are truly unique (excluding the collections of thousands of almost-identical pictures with very similar traits and no concrete use case);
- Loyalty coins and schemes, where the crypto asset is not transferable.
As the MiCA regulation is new, further amendments may change what qualifies or not as an exemption.
They reached success and shared it with us:
As a result of the fruitful cooperation with LegalBison, Yellow Card obtained a VASP registration, fast and without any legal complications.
LegalBison excels at adapting to challenges and demonstrates a perfect understanding of our business needs.
Quick set-up and straightforward process. It was a smooth process, we are happy to have chosen LegalBison as our Partner for incorporations, globally.
How to get a European crypto license under MiCA
The license application and obtainment processes will be transformed under MiCA as well.
Our legal team has studied and outlined the main takeaways of the new licensing procedure under MiCA below.
- Management Body
- Share Capital
- IT Assessment
- Whitepaper
- Programme of Operations
- Obligations
Management body of a MiCA-compliant crypto-asset service provider
MiCA defines the person or persons seeking admission to crypto asset trading and other operations with crypto assets as a “management body”. It pertains to all individuals running issuers of the asset-referenced tokens (ARTs) and offering other services and activities related to ARTs that are subject to licensing under MiCA. The management body must be appointed in accordance with the national law, giving its members the power to set the entity’s strategy, objectives, and overall direction, as well as oversee the management decision-making process and effectively direct the business activities of the licensed entity.
The admission checklist for the management body as part of the licensing application under MiCA includes:
- identity documents of the members of the management body of the applicant issuer;
- fit and proper check of each management body member;
- proof of non-criminal records and the absence of penalties imposed under the applicable commercial law, insolvency law and financial services law, or in relation to anti-money laundering and counter-terrorist financing, to fraud, or to professional liability;
- proof of adequate knowledge, skillset, and experience, as well as sufficient time to manage the issuer of the asset-referenced token.
Share capital & prudential / solvability requirements under MiCA
Depending on the type of crypto services provided, all potential licensees under MiCA fall into three classes.
Subsequently, each class has its own permanent minimum capital requirements laid out in the graph below. The information in the graph is taken from Annex IV of the MiCA regulation.
| License Class | Types of services | Minimum capital
requirements |
| Class 1 | — execution of orders on behalf of clients;
— placing of crypto-assets; — providing transfer services for crypto-assets on behalf of clients; — reception and transmission of orders for crypto-assets on behalf of clients; — providing advice on crypto-assets; and/or — providing portfolio management on crypto-assets. |
EUR 50.000 |
| Class 2 | — providing custody and administration of crypto-assets on
behalf of clients; — exchange of crypto-assets for funds; and/or — exchange of crypto-assets for other crypto-assets. |
EUR 125.000 |
| Class 3 | Crypto-asset service provider authorised for any crypto-asset
services under class 2 and: — operation of a trading platform for crypto-assets. |
EUR 150.000 |
Registered crypto asset providers under MiCA must have at all times prudential safeguards equal to an amount at least higher than the permanent minimum capital requirements or one-quarter of the fixed overheads of the preceding year, reviewed annually. The prudential safeguards must take either the form of the licensee’s own funds after the deductions in full or an insurance policy covering the territories of the Union where crypto-asset services are provided or a comparable guarantee.
Consequently, while applying for a license, the candidate must demonstrate proof of meeting the requirements for prudential safeguards.
Technical assessment (ICT, cybersec, tech description)
The technical requirements for licensing under MiCA have been transformed in the following way: now, as part of their application documentation package, candidates must provide the technical documentation of the ICT systems and security arrangements, and their description in non-technical terms.
Whitepaper for crypto asset issuers
Crypto asset issuers (CAs) under MiCA are required to draw up, send to their competent authority, and publish a so-called ‘crypto-asset white paper’, a document that, according to Recital 24 of the Regulation, should contain ‘general information on the issuer, offeror or person seeking admission to trading, on the project to be carried out with the capital raised, on the offer to the public of crypto-assets or on their admission to trading, on the rights and obligations attached to the cryptoassets, on the underlying technology used for such crypto-assets and on the related risks.’
It is important to state that the whitepaper’s content may differ, depending on the asset classification of the crypto asset (ART, EMT or else). The MiCA regulation details the whitepaper requirements for each type of crypto asset (see the chapters above for more detailed information).
The crypto-asset white paper should not, however, contain a description of risks that are ‘unforeseeable and very unlikely to materialise’.
A white paper drawn up in at least one of the official languages of the home Member State and of any host Member State, or, alternatively, in a language customary in the sphere of international finance (currently English) is an indispensable part of the regulatory requirements while applying for a license under MiCA.
Programme of operations of the crypto-asset service provider
The crypto asset services to be provided, how they will be provided, to whom, and respectfully to which policies and procedures, should be documented by the applicant to a MiCA license. The regulators expect this information to be conveyed in the form of a programme of operations: a detailed business plan.
As for the whitepaper in the case of crypto asset issue, the content of the programme of operations will depend on the target activities to be regulated. The project may be a crypto asset service provider (CASP) and/or crypto asset issuer, and then also face different needs for information, depending on the nature of the crypto asset to be issued.
This document is mandatory for application, as stated by Article 18.2.(d) of the MiCA regulation.
LegalBison can assist with the proper drafting of your programme of operations, with the assistance and care of our MiCA lawyers.
Obligations after licensing
Crypto-asset service providers and crypto-asset issuers are liable to respect the requirements they had to meet for licensing at all times.
Depending on the activity undertaken, the obligations slightly differ, but mostly revolve around the necessity to comply with AML-KYC policy application and enforcement, reporting of clients and financial data, technical assessments, and complete data of holdership and transactions in the case of a crypto-asset issuer.
It is important to note that the prudential requirements (share capital for solvability) shall be reevaluated yearly, on the basis of the CASP’s or CA issuer’s activity in terms of turnover and market capitalization of its crypto-asset (if relevant).
MiCA License's application process
As LegalBison’s legal team discovered the final text of MiCA, our FinTech lawyers were glad to acknowledge that the schedule of licensing was significantly shorter than most of the current crypto licenses in Europe. As per the regulation and starting from December 31st, a MiCA licensed crypto company should be doable from scratch in the span of 3 to 4 months.
Application preparation
Acknowledging and preparing the rules to comply with, and the documentation to prepare to properly carry on an application for a CASP authorization under the MiCA regulation represents 80% of the work to be done to properly get licensed in the European Union, as per territorial applicability of MiCA.
LegalBison has already formulated the backbone of a successful application and is ready to provide you with a suitable set of documents and all the necessary guidance to ensure that your project receives the MiCA authorization in a seamless, hassle-free fashion.
Confirmation of reception of the application
Once the application is carried out to a domestic regulatory authority in charge of enforcing the MiCA regulation in its jurisdiction, the Regulation states in Article 63.1 that the competent authority must confirm reception within 5 working days.
Competent authorities checking if the application is complete
Once the application is confirmed to be received, Article 63.2 gives a time period of 25 days to the local competent authority to assess if the provided file for the application is complete and includes all the necessary elements and information required by the Regulation.
In case the application is deemed to miss some elements, the authority shall inform the applicant of which information is missing.
Application assessment
From the date of receipt of the complete application, the local authorities shall decide on granting or refusing the status of crypto-asset service provider, compliant with the MiCA regulation, within 40 days, as per Article 63.9.
There is potential for this procedure to be prolonged further, the Competent Authority may ask for additional clarifications up until the 20th working day prescribed in this part (Art. 63 (12)). If this were to happen, the assessment may be prolonged by a total of 20 working days.
Once the decision has been made by the regulatory authorities, the applicant shall be informed of the decision within 5 working days.
Bank account opening
The process of opening a bank account for a European MiCA crypto licensed company is made significantly easier, thanks to the reassurance provided by European institutions such as ESMA, ECB and EBA, who worked on designing and enforcing this new regulation.
The process of opening a bank account for a crypto company remains a difficult process and the legal assistance of our senior project managers will certainly make a decisive difference with the banking institutions.
The negotiation and opening process altogether are usually forecasted to last for a complete month.
Get ready for MiCA
Is your crypto business ready for MiCA? Do not leave this matter to chance, as the ESMA has announced heavy sanctions to non-compliant crypto-asset service providers.
Request an assessment and order the complementary compliance elements from our dedicated team, and ensure a smooth transition.
Explanations and differences with former crypto licenses
MiCA license in Poland
The VASP license in Poland, issued by the Polish Financial Supervision Authority, covers custodial services, fiat to crypto exchange, crypto to crypto exchange, and other popular services with crypto assets.
In early 2024, the Polish Financial Supervision Authority, which is also the main responsible body for the implementation of MiCA published a new draft legislation focusing on the changes in the VASP registration in Poland under MiCA. The legislation mainly defined the obligations of crypto asset issuers and service providers and introduced counteractive measures against the violation of regulations. The licensing requirements have been transformed according to the MiCA stipulations.
Note that the list below is not exhaustive and is only proposed for illustrative purposes.
| Current Requirements | Future Requirements |
|
|
MiCA license in Czech Republic
The crypto license in Czech Republic is one of the most popular, along with Poland, in the two years preceding the enforcement of MiCA. This VASP authorization is straightforward, simple and fast. This cheap crypto license allows entrepreneurs to launch their project in 2 to 3 months with minimal expenses and economic substance requirements.
Similarly as Poland, for the remainder of 2024, Czech Republic is a very good option to get started and hit the market for virtual asset service providers, with the outlook of complying with MiCA no later than on December 30th of 2024.
| Current Requirements | Future Requirements |
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MiCA license in Estonia
The Estonian crypto license has changed a lot since its first version was enforced in 2017. The latest version, enforced in 2023, brought the formerly light and cheap crypto license to a level of high requirements and scrutiny.
Estonia is one of the closest licenses, along with France, to what MiCA is going to be after its full enforcement in December 2024. Nonetheless, the duration of the registration process and the official willingness to reduce the number of crypto licensed companies in the small Baltic state may be a disadvantage for projects willing to start from scratch before December 2024.
| Current Requirements | Future Requirements |
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MiCA license in Lithuania
The crypto license in Lithuania was the most popular for a couple of years following the Covid-19 pandemic. Lighter and faster than the Estonian license, the VASP registration in Lithuania became the most popular crypto framework after 2020 and a change in the law in its Baltic neighbour.
With the experience gained and heightened requirements established since then, the MiCA license in Lithuania may be interesting to consider. With a business-friendly environment and an already educated area of specialists in fields connected with the operation of crypto companies, such as crypto accountants or managers, Lithuania is worth a look for upcoming crypto asset service providers.
| Current Requirements | Future Requirements |
|
|
MiCA license in France
DASP in France was one of the European legislations that set the tone for the drafting and implementation of MiCA. Consequently, the current regulations have been brought in line with MiCA, mitigating the adaptation to the new authorization criteria for companies who currently hold the DASP license in France.
The enforcement of MiCA may represent an opportunity for the growing blockchain ecosystem of France, as the licensing duration in France was reaching close to 2 full years of procedure. Going down to approximately 4 months thanks to a better streamlined process and more definite regulation might make France an interesting destination for crypto companies again.
Meanwhile, it is highly advised to consider purchasing an existing French crypto licensed company and to work on complying with MiCA before the end of 2024. LegalBison has a rolling stock of French crypto company available on request.
| Current Requirements | Future Requirements |
|
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MiCA license in Luxembourg
The crypto license in Luxembourg is a prestigious framework that will also be fully replaced by the MiCA regulation in December of 2024. Providing a select number of companies with the business and tax friendly environment of Luxembourg, this VASP authorization may actually become more accessible to market participants thanks to MiCA.
| Current Requirements | Future Requirements |
|
|
MiCA license in Austria
The crypto license in Austria is supported by the long-standing experience and expertise of Austrian lawmakers, making it one of the most popular framework for crypto-assets who qualify as financial instruments, such as crypto derivatives and security tokens.
It is foreseeable that under MiCA, Austria will remain one of the best choice for business models implying the emission or brokerage of financial instruments relative to cryptocurrency. The existing crypto framework of Austria is also very close to the expectations of the European regulators with MiCA, making it a good head start to the new rules.
| Current Requirements | Future Requirements |
|
|
MiCA license in Cyprus
Cyprus and its crypto license are famous players of the FinTech regulation market. With its world famous regulatory body, the CySEC, the VASP license of Cyprus didn’t get as much traction as its Forex license in the past, as it allowed virtually any trading broker to enter the European market.
With incentives for business and a competitive tax rate, our FinTech teams is following closely on the potential of the MiCA license in Cyprus.
| Current Requirements | Future Requirements |
|
|
- Poland
- Czech Republic
- Estonia
- Lithuania
- France
- Luxembourg
- Austria
- Cyprus
MiCA license in Poland
The VASP license in Poland, issued by the Polish Financial Supervision Authority, covers custodial services, fiat to crypto exchange, crypto to crypto exchange, and other popular services with crypto assets.
In early 2024, the Polish Financial Supervision Authority, which is also the main responsible body for the implementation of MiCA published a new draft legislation focusing on the changes in the VASP registration in Poland under MiCA. The legislation mainly defined the obligations of crypto asset issuers and service providers and introduced counteractive measures against the violation of regulations. The licensing requirements have been transformed according to the MiCA stipulations.
Note that the list below is not exhaustive and is only proposed for illustrative purposes.
| Current Requirements | Future Requirements |
|
|
MiCA license in Czech Republic
The crypto license in Czech Republic is one of the most popular, along with Poland, in the two years preceding the enforcement of MiCA. This VASP authorization is straightforward, simple and fast. This cheap crypto license allows entrepreneurs to launch their project in 2 to 3 months with minimal expenses and economic substance requirements.
Similarly as Poland, for the remainder of 2024, Czech Republic is a very good option to get started and hit the market for virtual asset service providers, with the outlook of complying with MiCA no later than on December 30th of 2024.
| Current Requirements | Future Requirements |
|
|
MiCA license in Estonia
The Estonian crypto license has changed a lot since its first version was enforced in 2017. The latest version, enforced in 2023, brought the formerly light and cheap crypto license to a level of high requirements and scrutiny.
Estonia is one of the closest licenses, along with France, to what MiCA is going to be after its full enforcement in December 2024. Nonetheless, the duration of the registration process and the official willingness to reduce the number of crypto licensed companies in the small Baltic state may be a disadvantage for projects willing to start from scratch before December 2024.
| Current Requirements | Future Requirements |
|
|
MiCA license in Lithuania
The crypto license in Lithuania was the most popular for a couple of years following the Covid-19 pandemic. Lighter and faster than the Estonian license, the VASP registration in Lithuania became the most popular crypto framework after 2020 and a change in the law in its Baltic neighbour.
With the experience gained and heightened requirements established since then, the MiCA license in Lithuania may be interesting to consider. With a business-friendly environment and an already educated area of specialists in fields connected with the operation of crypto companies, such as crypto accountants or managers, Lithuania is worth a look for upcoming crypto asset service providers.
| Current Requirements | Future Requirements |
|
|
MiCA license in France
DASP in France was one of the European legislations that set the tone for the drafting and implementation of MiCA. Consequently, the current regulations have been brought in line with MiCA, mitigating the adaptation to the new authorization criteria for companies who currently hold the DASP license in France.
The enforcement of MiCA may represent an opportunity for the growing blockchain ecosystem of France, as the licensing duration in France was reaching close to 2 full years of procedure. Going down to approximately 4 months thanks to a better streamlined process and more definite regulation might make France an interesting destination for crypto companies again.
Meanwhile, it is highly advised to consider purchasing an existing French crypto licensed company and to work on complying with MiCA before the end of 2024. LegalBison has a rolling stock of French crypto company available on request.
| Current Requirements | Future Requirements |
|
|
MiCA license in Luxembourg
The crypto license in Luxembourg is a prestigious framework that will also be fully replaced by the MiCA regulation in December of 2024. Providing a select number of companies with the business and tax friendly environment of Luxembourg, this VASP authorization may actually become more accessible to market participants thanks to MiCA.
| Current Requirements | Future Requirements |
|
|
MiCA license in Austria
The crypto license in Austria is supported by the long-standing experience and expertise of Austrian lawmakers, making it one of the most popular framework for crypto-assets who qualify as financial instruments, such as crypto derivatives and security tokens.
It is foreseeable that under MiCA, Austria will remain one of the best choice for business models implying the emission or brokerage of financial instruments relative to cryptocurrency. The existing crypto framework of Austria is also very close to the expectations of the European regulators with MiCA, making it a good head start to the new rules.
| Current Requirements | Future Requirements |
|
|
MiCA license in Cyprus
Cyprus and its crypto license are famous players of the FinTech regulation market. With its world famous regulatory body, the CySEC, the VASP license of Cyprus didn’t get as much traction as its Forex license in the past, as it allowed virtually any trading broker to enter the European market.
With incentives for business and a competitive tax rate, our FinTech teams is following closely on the potential of the MiCA license in Cyprus.
| Current Requirements | Future Requirements |
|
|
FAQ about the MiCA license and regulation
MiCA is the new regulation of the European Union that will come into force on December 30, 2024, replacing all the previous European laws and regulations regarding crypto assets.
All European jurisdictions that license crypto asset providers and issuers of crypto assets will implement the same licensing procedure and requirements starting on December 30, 2024. To properly prepare your business for licensing under MiCA, it’s highly advisable to secure the assistance of a professional legal team.
MiCA has introduced a unified legal framework for crypto assets that will cover the entirety of the European Union. Under MiCA, entities formerly known as VASPs will be deemed as CASPs, and all legal entities applying for a CASP license in any of the European jurisdictions will have to meet the licensing requirements as established in the new regulation. MiCA has also introduced a new classification of tokens, dividing them into e-money tokens (EMTs), asset-referenced tokens (ARTs), and other crypto assets.
Utility tokens under MiCA shall be classified into the 3rd group (‘other crypto-assets’). These tokens are not subject to the new regulations since they do not derive their value from other assets and are fully decentralized. Note that there are still a few requirements imposed, if the token gives access to a service that is not operational, and on the duration of the public offering of such a token.
MiCA compliance entails the full execution of all MiCA requirements by a CASP or an issuer of crypto assets in a way that would allow this legal entity to operate in full legality, obtain a license, and avoid severe sanctions provided by the regulation.
Our lawyers wrote a guide for owners and directors of Virtual Asset Services Providers in Europe, about preparing their companies for MiCA.
NFTs that are truly unique and are not part of huge NFT collections are fully exempt from MiCA. NFTs whose commonality make their fungibility discutable, as in they are highly similar to one another, are then falling into the scope of MiCA.
The crypto travel rule under MiCA is the transfer of a similar rule from the traditional finance sector to transfers made in crypto. It entails that the information on every asset’s source and its beneficiary owner are transferred along with the transaction and must be stored on both sides of it.
Get in touch with our MiCA experts
Do not stay in the dark. Whether you run a VASP in a EU member state or are planning to form a crypto company in Europe, we welcome your questions and requests!
Our team of legal experts has mastered the MiCA regulation to ensure flawless services to our clients.
Leave a request now for more information and a personalized consultation for your project.
Legal experts in designing solutions for crypto licensing worldwide.
Blockchain enthusiast and expert on cryptocurrency and FinTech related laws.
