An important difference between CASP license and CASP notification pathways
Crypto-Asset Service Providers (CASPs) as outlined in MiCA are entities engaged in offering one or more crypto-asset services to clients professionally. They are authorized to provide these services in compliance with Article 59 of MiCA.
MiCA defines 'crypto-assets' as digital representations of value or rights that can be electronically transferred and stored using distributed ledger technology or similar means.
Crypto-asset services encompass various activities related to crypto-assets, including:
Custody and administration of crypto-assets for clients
Operating trading platforms for crypto-assets
Exchanging crypto-assets for funds
Exchanging crypto-assets for other crypto-assets
Executing orders for crypto-assets on behalf of clients
Placing crypto-assets (g) Receiving and transmitting orders for crypto-assets for clients
Providing advice on crypto-assets
Offering portfolio management for crypto-assets
Providing transfer services for crypto-assets for clients
According to the MiCA, a crypto-asset service provider’ means a legal person or other undertakings (a private limited company or public limited company in Estonia) whose occupation or business is the provision of one or more crypto-asset services to clients on a professional basis, and that is allowed to provide crypto-asset services.
It means, that any entity seeking to offer the services mentioned above in the EU must obtain authorization under MiCA, either through:
a CASP license application (refer to Article 63 of MiCAR) or
a CASP notification (refer to Article 60 of MiCAR).
Here comes the difference between these two possibilities.
Suppose your company is a certain type of already regulated entity and intends to provide specific crypto-asset services mentioned earlier. In that case, you must submit a CASP notification per Article 60 of MiCAR.
These entities include:
Credit Institutions
Central Securities Depository
Investment Firms
Market Operators
Electronic Money Institutions
UCITS Management Company
Alternative Investment Fund Manager
If you are a legal person, who is not on this list of "certain types" of companies and wish to provide (or already provide) virtual asset services, then you should go for a MiCA CASP license.
Based on our experience, we can say that a CASP license application will take several months. Even in a best-case scenario, it will take at least three to five months, for example, because the applicant has to make certain changes. A best-case scenario generally means that the application is complete and of high quality, but also that products and services are not very complex or high-risk and no significant organizational changes are required.
It is important to submit a comprehensive license application, explaining why you comply with MiCA and clearly stating how your internal procedures meet the requirements.
A good practice is to obtain advice from industry professionals in preparation for your MiCA application where necessary while remaining fully responsible for and informed about the content of your license application. Such advice may relate to the design and implementation of AML&KYC policy, risk assessment documents, and more.