The European Union’s Regulation (EU) 2023/1114, known as the MiCA Regulation (Markets in Cryptoassets Regulation), provides a unified framework to regulate the issuance, trading, and provision of services related to cryptoassets. This article addresses the requirements and procedures to apply for the licenses required under this Regulation.
The main objective of the MiCA Regulation is to establish a harmonized regulatory framework at the European level governing the issuance, admission to trading, and provision of services related to cryptoassets.
MiCA identifies four primary categories of cryptoassets:
- Electronic Money Tokens (EMTs): These are digital assets pegged to a single fiat currency intended as a payment method.
- Asset-Referenced Tokens (ARTs): These tokens aim to maintain stable value by being backed by multiple assets, fiat currencies, or other crypto assets.
- Utility Tokens: Digital assets granting access to a specific product or service within a blockchain network.
- Other CryptoAssets: Any digital asset not pegged to external values.
The Regulation excludes non-fungible tokens (NFTs) and security tokens regulated under MiFID (Markets in Financial Instruments Directive).
Services regulated under the MiCA Regulation
The services covered under the MiCA Regulation that require authorisation from Crypto Asset Service Providers (CASP) include:
- Custody and administration of cryptoassets on behalf of clients.
- Management of a cryptoasset trading platform.
- Exchange of cryptoassets for funds.
- Exchange of cryptoassets for other cryptoassets.
- Execution of orders related to cryptoassets on behalf of clients.
- Placement of cryptoassets.
- Reception and transmission of orders related to cryptoassets on behalf of clients.
- Advice on cryptoassets.
- Management of cryptoasset portfolios.
- Provision of transfer services for cryptoassets on behalf of clients.
Requirements for the authorization of crypto asset service providers
Pending the entry into force of the MiCA Regulation in Spain, the Comisión Nacional del Mercado de Valores (CNMV) has published the Manual for the authorization request of crypto asset service providers, detailing the requirements for the submission:
- Legal Personality: The application must be submitted by a duly constituted and registered legal entity in an EU Member State. It should include:
- The identity of shareholders and partners, direct or indirect, who hold qualified stakes.
- The amount of these stakes.
- Evidence that the partners and shareholders enjoy sufficient good repute.
- Minimum Share Capital Requirement: The entity must meet the minimum share capital requirements set by the MiCA Regulation, which vary depending on the type of crypto asset and the specific activity.
| Classes | Authorised Services | Minimum Share Capital (€) |
|---|---|---|
| Class 1 | Execution of orders on behalf of clients Placement of cryptoassets Provision of crypto asset transfer services on behalf of clients Reception and transmission of orders related to crypto assets on behalf of clients Advisory services regarding crypto assets, and/or Management of crypto asset portfolios. | Service of Classes 1 and 2, along with: Management of a crypto asset trading platform. |
| Class 2 | Services of Class 1, along with: 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. | 125,000 |
| Class 3 | Service of Classes 1 and 2, along with: Management of a crypto asset trading platform. | 150,000 |
- Governance and Management: The applicant entity must demonstrate:
- An appropriate governance structure of qualified managers and staff with proven experience in the crypto asset sector.
- Identified managers with certified good repute, knowledge, skills, and experience to perform their roles. These aspects will be evaluated individually and collectively.
- Certification from the relevant local authorities confirming that these managers have no convictions for offences related to money laundering, terrorism financing, or any other activities that could undermine their integrity.
- Business Plan and Continuity Plan: The applicant must present a three-year plan outlining:
- The planned crypto asset services
- The marketing strategy and target audience
- The types of crypto assets involved
- A business plan including stress scenarios.
- Security and Data Protection Measures: The entity must implement adequate measures to ensure system security and protect user personal data.
- Policies for Anti-Money Laundering and Terrorism Financing Prevention: The entity must establish policies and procedures to prevent money laundering and terrorism financing in compliance with applicable regulations (anti-money laundering manual).
- Transparency and Information Disclosure: The entity must provide clear and comprehensive information on the crypto assets offered, including associated risks and investor rights (risk and control manual).
Applicants must prove these requirements by submitting the relevant documents that demonstrate compliance. Foreign entities or individuals may need to provide a sworn and apostilled translation.
Application Procedure for the Authorization of Crypto Asset Service Providers
- Submission of the application to the CNMV via electronic means.
- CNMV’s evaluation of the application.
- CNMV’s decision, potentially authorizing the applicant entity to operate in the crypto asset market within the European Union.
- Ongoing supervision, including periodic reports and audits to ensure compliance with the MiCA Regulation.
MiCA represents a crucial step toward standardising crypto regulations in the EU, fostering a secure, transparent, and efficient crypto market. Companies must act swiftly to meet the requirements, ensuring smooth compliance and successful market entry.
If you require additional information regarding the requirements for cryptoasset service providers under the New MiCA regulation,
