fbpx
 

Why Existing VASPs Must Act Now: Transitioning to MiCA CASP Licensing

As the cryptocurrency sector in Europe evolves, so does the regulatory landscape. Many existing Virtual Asset Service Providers (VASPs) may not realize that under the new Markets in Crypto-Assets (MiCA) regulation, they must obtain a Crypto-Asset Service Provider (CASP) license to continue operating legally in the EU. Starting from January 1st, 2025 (with potential variations by jurisdiction), all existing Virtual Asset Service Providers (VASPs) will be required to apply for and obtain their MiCA CASP license to continue operating legally within the EU.

 

The Changing Regulatory Environment: From VASP to CASP

MiCA, set to become enforceable in 2025 (depending on the jurisdiction), is a comprehensive framework that will transform how crypto businesses operate across the European Union. One of its key requirements is the reclassification of current VASPs to CASPs, making the MiCA CASP license mandatory for any crypto-related operations within the EU.

 

Why MiCA CASP Compliance is Crucial for Existing VASPs

Many existing VASPs might assume that their current licenses are enough to meet future requirements. However, under MiCA, all VASPs will need to reapply and align their operations with stricter standards, including:

  • Enhanced Anti-Money Laundering (AML) protocols
  • Increased capital requirements up to €150,000, depending on the services offered
  • Physical EU presence with local management roles such as a Chief Compliance Officer (CCO) and Money Laundering Reporting Officer (MLRO)

 

Is MiCA compliance mandatory for all existing VASPs in the EU?

Yes, MiCA compliance is mandatory for all existing Virtual Asset Service Providers (VASPs) operating within the European Union. Under the new regulation, VASPs will be reclassified as Crypto-Asset Service Providers (CASPs) and must obtain the MiCA CASP license to continue their operations legally in the EU. Compliance with MiCA is essential to align with the EU’s standardized regulatory framework and ensure continued market access.

 

Essential Steps for Existing VASPs to Transition Smoothly

The transition from VASP to CASP will require significant effort, but taking proactive steps now can streamline the process. Here are the critical actions existing VASPs should consider:

  1. Conduct a Compliance Audit: Assess your current policies and procedures against MiCA’s requirements to identify gaps.
  2. Enhance AML Policies: Implement a more robust AML framework to meet MiCA’s stringent standards.
  3. Prepare Financial Reserves: Ensure your company meets the new capital thresholds mandated by MiCA.
  4. Set Up Local Management: Establish a local presence within the EU and appoint qualified individuals for key compliance roles.

 

Understanding the Application Timeline

The application process for MiCA CASP licenses will officially open in January 2025 (may vary by jurisdiction) with a potential transition period extending until mid-2026 for existing VASPs.

EU Member States have the flexibility to grant currently licensed VASPs an extra transition period of up to 18 months, known as the “grandfathering clause,” allowing them to operate without a MiCA license. This extension could permit VASPs to continue functioning until as late as July 1, 2026, though the specific deadline may vary based on each Member State’s interpretation and implementation of these transitional provisions outlined in Article 143(3) of MiCA. Acting early not only secures your ability to operate but also positions your business as a leader in the regulated market.

 

Why Poland is an Ideal Jurisdiction for Your MiCA CASP License

Choosing the right jurisdiction for your MiCA CASP license is a strategic decision that can significantly impact your business operations. While we operate across various jurisdictions, our expertise indicates that Poland currently stands out as the best option for several reasons:

  • Regulatory Environment: Poland is known for its clear, supportive regulatory framework, making the licensing process more straightforward compared to other EU countries.
  • Cost-Effective Setup: The cost of establishing a business in Poland, including office space and compliance services, is relatively lower than in other EU regions, which is advantageous for startups and small businesses.
  • Skilled Workforce: Poland offers a large pool of highly qualified professionals in finance, compliance, and technology, essential for meeting MiCA’s stringent staffing requirements, like appointing a CCO and MLRO.
  • Strategic Location: Situated at the heart of Europe, Poland provides easy access to other major EU markets, making it a convenient base for expanding your crypto operations across Europe.Read more about Poland MICA CASP license.

 

The Importance of Choosing the Right Jurisdiction

Selecting the appropriate jurisdiction for your MiCA CASP license is crucial as it affects your compliance costs, ease of doing business, and regulatory obligations. The right jurisdiction can streamline the licensing process, reduce operational expenses, and ensure smoother communication with local authorities. Poland stands out as a highly advantageous choice for businesses aiming to secure a MiCA CASP license efficiently and cost-effectively.

 

How Complium Can Help

Navigating the complexities of MiCA can be challenging, especially for VASPs unfamiliar with the new standards. Complium offers tailored compliance solutions, from AML policy development to full application management, ensuring a smooth transition to the MiCA CASP license.

We provide customized solutions to meet regulatory requirements, including assistance with setting up a local office and recruiting skilled professionals for key roles like CEO, CCO, and MLRO. Our support extends beyond recruitment, offering continuous training and guidance in office and team management to ensure that all compliance needs are met effectively.

For existing VASP license holders, we recommend a phased approach to MiCA compliance. This strategy helps in systematically addressing each regulatory requirement while securing specialized experts as the deadline approaches, ensuring efficient management of resources and smooth adaptation to the new standards.

We outline the different phases for existing VASPs to facilitate their transition to a CASP license. Please refer to the illustration below for a detailed overview of these stages.

MICA CASP LICENSING COMPLIUM

 

How Long Does it Take to Get the MiCA CASP License?

The MiCA CASP license application process typically involves submitting your application to the regulator, who will check its completeness within 25 business days. Once all details are confirmed, the regulator has up to three months to assess compliance and make a decision, usually notifying the applicant within three business days. Although the process is expected to take about four months, experience with similar licenses like crowdfunding or EMI suggests it could extend to around eight months.

What happens if my business doesn’t comply with MiCA?

If your business fails to comply with the MiCA regulation, it could face severe consequences, including:

  • Fines and Penalties: Financial penalties ranging from 3% to 12.5% of annual turnover.
  • License Revocation: Suspension or loss of your CASP license.
  • Reputational Damage: Loss of trust from clients and investors.
  • Management Bans: Prohibitions on holding managerial positions for responsible individuals.
  • Restricted Operations: Limitations on service offerings or expansion within the EU.

Ensuring compliance is vital to avoid these risks and maintain your business’s credibility and operational rights in the EU.

Conclusion

Existing VASPs cannot afford to be complacent about MiCA compliance. The new regulation demands not just a change in licensing but also a transformation in how businesses operate. Don’t let your current VASP license expire without taking action — start preparing now for a seamless transition to a MiCA CASP license.

Ready to Begin?

Contact Complium for a free 30-minute consultation to assess your readiness for MiCA and start your journey towards compliance today!

 

OFFICE DETAILSOffice

Poland office: +48 222 085 280
Estonian office: +372 5874 6380
office@complium.eu

COMPANY DETAILSComplium Poland Sp. Z.o.o

Registry code:  0001089880
VAT number: 5252993463
Office: Solipska 3/5, 02-482 Warszawa

bt_bb_section_bottom_section_coverage_image