Key Requirements for CASP License Compliance Under MiCA Regulation

Key Requirements for CASP License Compliance Under MiCA Regulation

Blog Article

With the MiCA (Markets in copyright-Assets) Regulation, the European Union has set clear expectations for how copyright businesses should operate. Obtaining a CASP (copyright-Asset Service Provider) license is only the beginning—the real challenge lies in maintaining regulatory compliance on an ongoing basis. To stay compliant and avoid penalties, CASPs must adhere to a wide range of obligations covering operations, consumer protection, security, governance, and financial reporting.

In this article, we outline the core compliance requirements that licensed CASPs must follow under the MiCA regulation. These requirements are designed to enhance market integrity, safeguard consumers, and reduce systemic risks in the copyright-asset space.

• Implement strong governance and internal controls
  CASPs are expected to maintain a well-organized governance structure with clearly defined roles and responsibilities. This includes appointing senior management with the necessary expertise and integrity, establishing independent control functions (such as compliance and risk management), and ensuring that decision-making processes are documented and transparent. Proper oversight is essential to prevent conflicts of interest and to ensure that management acts in the best interest of clients and stakeholders.

• Maintain robust anti-money laundering (AML) and know-your-customer (KYC) systems
  While AML obligations stem from EU-wide directives rather than MiCA directly, CASPs are still fully subject to them. This means establishing comprehensive AML/KYC frameworks to detect and prevent financial crime. You must verify the identity of clients, monitor transactions for suspicious activity, and report any concerns to the relevant authorities. In addition, CASPs should conduct regular training for staff and update AML procedures as risks evolve.

• Safeguard client assets and ensure custody transparency
  One of MiCA’s top priorities is the protection of client assets. CASPs offering custody services must hold client copyright-assets separately from their own and must clearly identify ownership at all times. They must also implement measures to ensure the recovery of assets in the event of insolvency, theft, or technical failure. Transparency, traceability, and secure wallet management are essential components of this requirement.

• Disclose all relevant information to clients
  MiCA places strong emphasis on investor protection. CASPs must provide clients with clear, complete, and non-misleading information before entering into a business relationship. This includes details about services offered, associated risks, pricing, complaint-handling processes, and legal rights. Marketing materials must be accurate and not overstate potential returns. Transparency is critical in helping consumers make informed decisions in a volatile market.

• Establish operational resilience and cybersecurity protocols
  Given the digital nature of copyright-assets, CASPs must prioritize IT security and business continuity planning. You are required to have measures in place to prevent, detect, and respond to cyber threats, data breaches, and system outages. This involves maintaining secure systems, conducting regular penetration tests, encrypting sensitive data, and ensuring backup mechanisms are in place. A strong cybersecurity posture helps maintain user trust and regulatory confidence.

• Submit regular financial and compliance reports
  Licensed CASPs must report to their national regulators on a periodic basis. These reports may include financial statements, operational summaries, compliance reviews, and risk assessments. The goal is to ensure the ongoing health of the business and its ability to meet obligations to clients. Timely and accurate reporting is a vital part of maintaining regulatory transparency.

• Meet capital and liquidity requirements
  MiCA requires that CASPs maintain sufficient capital to support their operations and absorb losses. The specific capital requirements depend on the type and scale of services provided, but the funds must be readily available and unencumbered. You must also be able to demonstrate ongoing financial health, including liquidity ratios and solvency assessments. This ensures that clients are protected even if the business experiences temporary downturns.

• Handle complaints and disputes fairly
  CASPs are required to put in place a fair and transparent complaint-handling process. Clients must be able to lodge complaints easily and receive timely responses. There should be a clear procedure for resolving disputes, whether internally or through alternative dispute resolution mechanisms. Regulators may review your complaint handling records to assess client satisfaction and compliance with consumer protection rules.

• Ensure outsourcing arrangements meet regulatory standards
  If your CASP relies on third-party service providers—for example, for cloud hosting, KYC services, or technical infrastructure—you remain responsible for those activities. MiCA requires that outsourcing does not compromise the quality or security of services. Contracts must clearly define roles, data access rights, service-level expectations, and exit strategies. Regulators may review outsourcing arrangements during audits or licensing reviews.

• Maintain ongoing communication with regulators
  Licensed CASPs must be proactive in maintaining contact with their national competent authority. This includes notifying the regulator about material changes in ownership, business structure, service offerings, or any events that could affect compliance. Transparency builds trust and can help avoid regulatory action in the event of a mistake or crisis. Failing to inform regulators of key changes may result in license suspension or revocation.

• Monitor and manage market abuse risks
  Although MiCA is separate from traditional financial market regulations, it still imposes obligations to prevent manipulation or unfair practices. CASPs must have systems in place to detect and report insider trading, wash trading, and other forms of market abuse. If your platform facilitates copyright-asset trading, you must monitor trades for unusual behavior and ensure fair access to market information for all users.

• Stay updated with regulatory developments and adapt as necessary
  MiCA is a living regulation, and the copyright sector is rapidly evolving. CASPs must remain alert to updates in EU rules, ESMA guidance, and national implementation practices. Legal teams, compliance officers, and business leaders must continuously evaluate the business model to ensure that it aligns with current law. Failing to adapt to new requirements can expose your business to penalties or reputational damage.

In conclusion, compliance with MiCA’s CASP requirements is an ongoing responsibility that extends far beyond the initial licensing process. It demands a proactive and structured approach to governance, risk management, data security, and customer care. Businesses that take compliance seriously will not only avoid regulatory pitfalls—they will gain a competitive edge by building trust with regulators, investors, and clients alike.

The CASP license is more than a permission slip—it’s a badge of legitimacy in a rapidly maturing industry. By meeting the EU’s high standards, your business signals that it is prepared for the future of regulated copyright-asset services.

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