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How to Get a CASP License in the EU: A Complete Step-by-Step Guide

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Obtaining a CASP license in the EU is essential for operating a compliant cryptocurrency business in any of the 27 member states. This guide walks you through the process of how to get a CASP license in the EU, from legal requirements to specific application steps.

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What is a CASP License and Why is it Important?

A CASP (Crypto Asset Service Provider) license is a regulatory authorization required for businesses offering crypto-related services within the European Union. Under the upcoming MiCA & DORA (Markets in Crypto-Assets + Digital Operational Resilience Act) regulation, obtaining this license is a necessity for companies to operate legally and in full compliance with EU financial laws.

The importance of this crypto license cannot be overstated. It establishes a clear regulatory framework for crypto businesses, reducing legal risks and maintaining operational stability. Without proper licensing, companies may face fines, restrictions, or even bans from operating in EU member states.

Benefits of Obtaining a CASP License

01

Legal Compliance

  • Ensures that your business is in tune with EU-wide crypto regulations and can operate without legal uncertainties.
  • Compliance with the MiCA framework thus helps prevent legal disputes, financial penalties, and potential business shutdowns due to non-compliance.

02

Customer Protection.

  • Builds trust by implementing strong AML (Anti-Money Laundering) and KYC (Know Your Customer) measures.
  • These safeguards help prevent fraud, money laundering, and illicit financial activities. This makes for a safer environment for both businesses and their clients.

03

Market Transparency

  • Encourages fair competition and improves the credibility of crypto service providers.
  • A well-regulated market attracts institutional investors and enhances the reputation of the crypto industry as a whole.

04

Regulatory Access

  • Upon obtaining a crypto license in Europe, you can operate across multiple EU countries (including multiple crypto tax free countries) under a unified framework, expanding their market reach.
  • This allows businesses to scale efficiently and reduces the need for separate licenses in each member state.

As crypto regulations become stricter, obtaining a CASP license is simply crucial for businesses looking to establish themselves as legitimate, secure, and trustworthy players in the industry.

Key Requirements to Obtain a CASP License in the EU

Obtaining a CASP (Crypto Asset Service Provider) license under the MiCA (Markets in Crypto-Assets) regulation requires businesses to meet several key regulatory requirements. Below are the major criteria businesses must fulfill.

AML Compliance

  • A crucial part of the licensing process is strict adherence to Anti-Money Laundering (AML) and Counter-Terrorism Financing (CTF) regulations.
  • CASPs must implement Know Your Customer (KYC) procedures, transaction monitoring systems, and suspicious activity reporting to prevent illicit financial activities.
  • Regulatory authorities assess how well a company applies these measures before granting approval.

Capital Requirements

  • CASPs must also meet minimum capital thresholds, which vary based on the type of crypto services offered.
  • For example, platforms facilitating crypto-to-fiat exchanges or custodial services typically have higher capital requirements than advisory firms.
  • These financial reserves are needed so that businesses have sufficient liquidity to operate and protect users in case of financial instability.

Operational Resilience

  • In addition, businesses must demonstrate strong IT security, risk management protocols, and business continuity plans.
  • This includes compliance with DORA (Digital Operational Resilience Act), which requires firms to safeguard their systems from cyber threats, data breaches, and operational failures.
  • Regulators will assess the ability of a company to handle disruptions and protect users' digital assets.

Corporate Governance

  • Regulators require a clearly defined company structure, with responsible executives and compliance officers overseeing legal and operational risks.
  • ИНГЛThe management team must have sufficient experience in financial services, compliance, and crypto operations.
  • ИНГЛAuthorities may also review the company’s internal policies and decision-making processes to check your accountability and risk management.

ИНГЛOrganizational Requirements

  • In order to legally operate, crypto asset service providers (CASPs) must establish a registered office in an EU Member State where they conduct at least part of their cryptocurrency-related activities. Additionally, their central management must be located within the EU, guaranteeing oversight and compliance with regional regulations.
  • Furthermore, at least one director must be an EU resident.

Consumer Protection

  • To safeguard customers, businesses must implement clear terms of service, transparent pricing structures, and secure custody solutions for client assets.
  • Also, they should ideally provide educational resources and disclosures to ensure customers understand the risks involved in crypto transactions.
  • Regulators emphasize user protection to build trust and credibility in the industry.

Regulatory Differences Between EU Member States

While MiCA provides a harmonized legal framework across the EU, some of the EU regulations on cryptocurrency may still vary a bit between member states. Different countries may impose additional AML/KYC requirements, higher capital thresholds, or stricter IT security standards. Also, processing times for obtaining a CASP license can differ based on local authorities. You should always research each jurisdiction’s specific requirements before applying for a license.

Navigating the CASP licensing process is daunting at first, but our experts can guide you every step of the way.

We have helped numerous businesses obtain crypto licenses in full regulatory compliance. Will you be next? Schedule a free consultation today!

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Getting a CASP License in the EU in 3 Steps

Obtaining a Crypto Asset Service Provider (CASP) license within the European Union is governed by EU Regulation 2023/1114 (MiCA). The licensing process follows these main stages:

01

Application Preparation and Submission

  • Legal Entity Formation

Businesses must register a company in the selected EU country, ensuring it meets the necessary capital and governance requirements. Some jurisdictions require local directors or compliance officers, which must be arranged before applying.

  • Documentation Preparation

The applicant must compile all necessary documents, including internal policies, procedures, and proof of compliance with MiCA regulations. The complete list of required documents is outlined in the MiCA rules, so that there’s no doubt on what must be submitted.

Also, while MiCA harmonizes crypto regulations across the EU, certain countries have faster approval processes, lower capital requirements, or more favorable tax environments. It’s crucial to select the jurisdiction that best aligns with your business needs.

  • Application Submission

Once the preparatory phase is complete, the business can submit its CASP license application to the relevant regulatory authority in the chosen country. The key steps typically are:

Filing the Application – The application is submitted to the designated financial regulator of the chosen EU member state. Examples of key regulators include:

  • AFM (Netherlands) – The Dutch Authority for Financial Markets
  • BaFin (Germany) – The Federal Financial Supervisory Authority
  • AMF (France) – The Autorité des Marchés Financiers
  • MFSA (Malta) – The Malta Financial Services Authority
  • Providing Additional Supporting Documents – Some regulators may require additional financial statements, proof of funds, or executive background checks to assess the company’s credibility.
  • Application Fee Payment – Depending on the jurisdiction, businesses may need to pay a non-refundable application fee to initiate the review process.

02

Confirmation of Application Receipt and Completeness Verification

  • Confirmation of Receipt

The competent authority must acknowledge receipt of the application within 5 working days.

  • Application Completeness Check

Following this, the regulator has 25 working days to verify that the application is complete. If any documents or information are missing, the authorities will set a deadline by which the applicant must submit the necessary materials.

  • Assessment and Decision

Once all documentation is in order, the authorities have 40 working days to evaluate whether the crypto asset service provider meets all legal requirements. This stage may involve background checks on company directors, a review of IT security systems, and an evaluation of risk management strategies.

If any deficiencies are found, the applicant may receive requests for additional information or modifications to their compliance framework. Companies should be prepared to address these inquiries promptly to avoid delays.

03

Decision Making

  • Notification of Decision & Official License Issuance

If the application successfully meets all requirements and the regulator is satisfied with the company’s compliance measures, the final approval process begins

Once approved, the regulator will grant the CASP license, allowing the business to legally operate in the selected EU country and provide crypto services under the MiCA framework.

The competent authority must inform the applicant of their decision within 5 working days of making it.

  • License Revocation

It’s important to note that the license may be revoked if the CASP fails to comply with national or international laws or if they engage in activities outlined in Article 64 of EU Regulation 2023/1114 (MiCA).

  • Ongoing Compliance

Even after receiving the license, CASPs must remain compliant with all legal requirements throughout their operations. Some jurisdictions may impose additional post-license obligations, such as periodic AML reporting, regular audits, or cybersecurity assessments. In this regard, we can provide additional anti- money laundering consulting as well.

With a CASP license, companies can now operate across all EU member states under the MiCA passporting system, eliminating the need for multiple licenses in different countries.

Common Challenges and How to Overcome Them

Navigating Complex Regulations

MiCA and other related regulations are quite intricate, requiring a deep understanding of legal requirements across multiple jurisdictions. To avoid costly mistakes, it’s crucial to work with experienced consultants who specialize in crypto licensing. They can interpret the regulations correctly and help your business remain compliant at every step of the application process.

Meeting Capital Requirements

Securing the necessary funds to meet capital requirements can be a challenge for many companies. However, this is a critical step in obtaining the CASP license. It’s essential to carefully assess the minimum capital thresholds for your jurisdiction, make a financial analysis and explore funding options such as venture capital, partnerships, or internal resources to meet these requirements.

IT Compliance

Aligning your IT infrastructure with MiCA and DORA (Digital Operational Resilience Act) standards is vital for securing a CASP license. This means setting up robust cybersecurity measures, data protection, and operational resilience. Work with IT experts who are familiar with regulatory standards to implement compliant systems that support your operations and protect your clients' assets.

Document Preparation

Aligning your IT infrastructure with MiCA and DORA (Digital Operational Resilience Act) standards is vital for securing a CASP license. This means setting up robust cybersecurity measures, data protection, and operational resilience. Work with IT experts who are familiar with regulatory standards to implement compliant systems that support your operations and protect your clients' assets.

Need expert guidance for your 
CASP license application?

 Our team can help you navigate the complexities of the licensing process, from documentation to IT compliance and beyond. Get in touch today to get started!

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Key Documents Needed for CASP Licensing

When applying for a Crypto Asset Service Provider (CASP) license, companies must submit several essential documents to demonstrate their compliance with regulatory requirements. Below is a detailed overview of the documents typically required for a successful CASP application.

01

Program of Operations

Outlines the crypto-asset services offered, such as trading or storage, detailing the scope and operational processes. It helps regulators understand the business model and service offerings.

02

Governance Arrangements

Describes the company’s organizational structure, including roles and decision-making processes. It ensures accountability and compliance with regulatory standards.

03

Critical Personnel Questionnaires

Provides background information on key personnel such as board members and UBOs. This helps regulators assess leadership competence.

04

Internal Control Mechanism

Details the financial and operational risk management policies to mitigate potential risks. Contains robust internal controls to protect against fraud and operational failures.

05

Risk Assessment Procedure

Outlines how the company identifies and mitigates operational, financial, and security risks. This framework is crucial for maintaining business stability and resilience.

06

Business Continuity Plan

Describes strategies to maintain operations during disruptions, ensuring minimal impact on services. It helps demonstrate the company’s resilience and preparedness.

07

IT Security Details

Provides information on the company’s IT infrastructure and security protocols. It proves that client data and crypto-assets are securely managed.

08

Prudential Safeguards

Shows that the company meets capital requirements and is financially stable. It assures regulators of the company’s ability to operate within financial guidelines.

09

Complaints Procedure

Outlines the process for handling client complaints efficiently and fairly. So that it’s clear that customer issues are addressed in a transparent manner.

10

Asset Segregation Protocol

Explains how client assets are kept separate from company funds for security. This protects clients in case of company insolvency or financial difficulties.

11

Market Abuse Detection System

Describes systems in place to detect and prevent market manipulation. Proves that the company operates in a fair and transparent market environment.

12

Custody Policy

Details the security measures for managing client crypto-assets, including cold storage and multi-signature protocols. It must be clear that assets are safely protected.

13

Trading Platform Rules

Defines the rules governing trading activities on the platform. Makes for fairness and transparency in market operations.

14

Commercial Policy

Outlines pricing, exchange rates, and fees for services. So that the company’s commercial practices are transparent and compliant with regulations.

15

Execution Policy

Describes how client orders are executed to achieve the best outcomes. It ensures that transactions are handled fairly and efficiently.

16

Advisor Qualifications

Shows that advisors are qualified to provide crypto-asset guidance and that clients receive accurate and professional advice.

We recommend that you regularly consult with legal and compliance experts

 to ensure that all requirements are met and each document is thoroughly reviewed before submission. If you need professional assistance to ensure your CASP application is thorough and compliant, we’re here for you.

Contact Us

Important Deadlines for MiCA and CASP Compliance

As a crypto service provider, staying on top of key deadlines is paramount. 
Here are the critical dates you need to remember:

June 2024

  • This marks the official start of the MiCA regulation’s implementation across the EU.
  • From this date, MiCA will start governing how crypto-asset service providers operate within the EU.
  • It’s essential for businesses to align their operations with the requirements outlined by MiCA from this point onward.

December 2024

  • By this date, CASPs (Crypto Asset Service Providers) must be fully compliant with MiCA.
  • This is the deadline for businesses to have their operations and systems in line with the regulation’s requirements
  • Non-compliance after this date could lead to serious consequences, including the denial of operating licenses in the EU.

2025 Deadline

  • Various EU member states may have their own specific compliance deadlines, so it’s essential to review local regulations and make sure your company meets each country’s expectations within the allotted time frame.

January 17, 2025

  • This is the crucial date by which all crypto companies must ensure full compliance with the Digital Operational Resilience Act (DORA).
  • DORA aims to strengthen the IT systems and operational resilience of financial institutions, and non-compliance could lead to operational risks or fines.

How We Can Help You Obtain a CASP License?

Navigating the CASP licensing process is surely a challenge. However, our end-to-end services can guide you through each step. 

Pre-Licensing Audit and Business Model Analysis:

  • We’ll review your business model, verify whether they align with MiCA requirements and prepare you for the application process.
  • Our experts will identify potential gaps and provide recommendations for improving your operational structure to meet regulatory expectations.

Application Preparation and Submission

  • We help you prepare all the necessary documentation for the CASP application, making sure that it’s complete, accurate, and in line with regulatory expectations.
  • Our team checks each document, so that it is meticulously reviewed to avoid delays or complications during the submission process.

Assistance with Regulatory Communication

  • We can facilitate communication with regulators, helping to clarify requirements, address feedback, and resolve any issues.
  • We will guide you through the regulatory process for a smooth and efficient interaction with the authorities to avoid unnecessary setbacks.

Ongoing Compliance and Operational Support

  • Our services don’t end with obtaining the license. We provide continuous support to make sure that your business remains compliant with MiCA and other regulations over time.
  • We assist with regular audits and updates to adapt to any changes in regulatory frameworks.
  • Additionally, we can also provide management consulting services or help you secure other payment institution licenses in Europe and elsewhere.

We are here to help you navigate the complex regulatory landscape and ensure your success in obtaining and maintaining a CASP license. Contact us and let’s get started!

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