There might be a need of yours to have MiCA researched if you earn money by providing diverse crypto stuff. You need to do that to realize how your business can adapt to the new law before on 30 December 2024 applications open for EU members.
Despite the availability of up-to-date information about the MiCA law, it may confuse rather than make things clear. Such questions might show up:
Urgent actions before the deadline
You are probably eager to know how it could be possible to apply for a MiCA license given your decent expertise and limited resources. Besides this, you probably want to know how to get approval from senior stockholders who don’t find compliance a number one priority for the company.
There are professional expert teams that have completed many applications and none of the currently existing rules haven’t been violated. It is because they have a deep understanding of the sector, in particular, its regulation norms.
From this particular guide, you will learn about MiCA, who requires its license, and how to get it, in particular, using the professional assistance of the expert team.
MiCA: a strict definition
It was the European Banking Authority that started the watchdog MiCA. As for this acronym, it stands for the Markets in Crypto Assets Regulation. The watchdog rolled out a set of laws for digital coins in the European bloc. The given rules should safeguard investors alongside customers and guarantee financial stability. The imitative should act against market violations in the crypto industry that was previously unregulated. The rules are expected to block:
- Anything that might manipulate or disrupt the financial market
- Insider trading or illegal reveal of insider information
A MiCA license: who needs it?
In the EU all the firms that provide digital coins need this license. That’s true for providers of such blockchain stuff as asset-referenced tokens, e-money tokens as well as other crypto assets, excluding stablecoins.
Despite there’s the only one MiCA license, built around the business model details may vary in the application. For asset-reference tokens and e-money tokens strict rules exist, while other digital coins are moderately scrutinized. These are examples of crypto asset services that fall under the MiCA regulation.
- Administering and safeguarding digital coins for customers
- Running a crypto trading platform
- Exchanging digital coins for other assets, including utility tokens, or cash
- Executing digital coin orders
- Transferring digital coins, offering advice, and managing investment portfolios
MiCA license requirements
Anti-money laundering laws have been regulated crypto asset services providers until now. If your VASP was registered before 30 December 2024, then you should get a CASP authorization. You still have time to have it completed until the deadline expires – 30 December 2025.
By the way, MiCA has offered the EU members to extend the transitional period to up to 18 months. As of now, the Central Bank of Ireland has opted for a 12-month transitional period.
Extra requirements
If you are willing to get the MiCA authorization as a crypto asset services firm you require meeting these criteria, which have to do with marketing and information communications, governance, and capital adequacy.
MiCA whitepaper
Companies operating in the crypto market usually release so-called “whitepapers”. As a rule, it happens each time they roll out a new digital coin. That’s MICA’s regulatory requirement for the sake of accountability and transparency.
A MiCA whitepaper is expected to come with information that could be relevant and useful to potential investors. Before publishing it, the local governing body requires validating it. Whitepapers act as a shield against various crypto scams such as OneCoin. As a matter of fact, OneCoin was known for releasing its whitepaper stuffed with attractive claims to persuade potential customers to purchase their product. MiCA doesn’t want that to repeat once again and therefore confirms that crypto businesses are responsible for what they publish.
MiCA marketing rules
MiCA urges companies to make their marketing content as well as disclosures honest, straightforward, and also free of any unclear or misleading information. Besides this, these companies should honestly highlight the risks closely connected with the services offered plus potential returns of crypto investments. As for possible conflicts of interest, they need to be openly disclosed.
Requirements for internal policies and governance principles
According to MiCA, a crypto company’s internal processes need to resemble those of other regulated financial services organisations. These include:
- Anti-money laundering
- Data protection
- Risk management
- Consumer and investor protection
- Safeguarding
- Business continuity
- Avoiding conflict of interest
- Capital adequacy criteria
How to prepare for your MiCA license application
As a rule, it takes approximately 12 weeks to prepare a license application. However, a great deal of preliminary work needs to be carried out. The following recommendations will help you to prepare your application:
- Realize the whole extent: One should realize which MiCA elements have to do with your company. It will give you an understanding what documents you should prepare and who needs to be involved.
- Implement the appropriate governance frameworks: Make sure you have the right policies and you generally adhere to the MiCA requirements.
- Assess your security infrastructure: You should make appropriate security arrangements. Ensure that your company is GDPR compliant.
- Have your human resources reviewed: Ensure you have skilled and sufficient manpower.
- Have your financial stability evaluated: Ensure you meet the capital adequacy criteria, and you can prove the sufficient financial stability of your company in the application.
- Have your third parties reviewed: If you collaborate with third parties, make sure you realize the security risks and have a adequate overview of the outsourcing process. It suggests due diligence when taking new partners.
- Hire advisors: These experts can back you from legal, compliance, and tax point of view. Thus, you can comply even with your knowledge gaps.
- Check your docs: Ensure you have everything you need to have your application submitted. Make sure everything is OK with your compliance framework, policies, procedures, whitepapers, and capital adequacy criteria. Additionally, your marketing should meet the requirements as well.
It all might seem very troublesome but anyway it’s worth doing. Once you get licensed in any EU country, you’ll obtain the right to passport this license out to other EU members. Therefore, get licensed one time and you will automatically comply across the entire EU markets.
How professional attorneys can help you to prepare for a MiCA license application
An expert team can support digital asset firms throughout the European Union with their license applications. They can provide you with practical support with your docs. They will pull together and prepare all the necessary docs. It will undoubtedly take the enormous pressure off your shoulders. Moreover, you can be assured that everything will be carried out correctly.
Keep the application on track with a dedicated project manager
A project like this might involve many stockholders, thus making it difficult to manage everybody’s time and responsibilities effectively. A team of professional attorneys can help you to create a project plan and hold meetings and workshops. This should help you to stay on track.
Workshops are good when it comes to gathering the required information that in turn can be used to provide the most relevant advice. Besides this, workshops also highlight areas where you have to make decisions or put new policies in place. Thus, everybody in your company has a good understanding of what they should do and when. In the end, before submitting the application, the policy gaps will be filled.
Ensure you have appropriate governance frameworks
One should realize that compliance can’t be everybody’s priority and it’s especially true for fast-paced firms focused on fast growth. Professional attorneys can help you to get senior-level support, so you could focus on long-term success without distracting on the nuances they will take care of.
These experts will also help you to adjust your governance frameworks. Paperwork will be their concern too. They will do the bulk of the crucial work to make your firm compliant.
Have your application checked with an external Case Officer Review
When it comes to preparing all the necessary docs, it’s often necessary to go back over docs you might have thought they are ready. As a result, you might have made updates in one place but missed them in another, thus generating a slew of inconsistencies throughout the application.
To avoid this, professional attorneys can offer such an exclusive option as a case officer review. He will objectively assess your request to make sure everything is OK. After this, you can have the final request submitted.
Forget about facing MiCA alone
Despite compliance and authorisation procedures are not new to the EU cryptocurrency sector, MiCA happens to be the first set of laws regulating the crypto market from a comprehensive standpoint. That would be a new approach for many companies. The problem is that senior executives might not fully recognize the whole importance of the legislation, while you might not have corresponding expertise to complete the application successfully.
Professional attorneys can help to remove this obstacle. You need to find ones already helping cryptocurrency firms with their compliance for a long time. If you make the right choice, this will lift the enormous burden off your shoulders and you will finally get along with MiCA.
