How to Obtain a CASP License in the European Union
How to Obtain a CASP License in the European Union
Blog Article
As copyright regulation tightens across the globe, the European Union has taken a significant step forward by introducing the Markets in copyright-Assets (MiCA) Regulation. At the heart of this framework is the CASP license—short for copyright-Asset Service Provider license—which authorizes businesses to legally offer copyright-related services throughout the EU. Obtaining this license opens access to a single European market, boosts investor trust, and ensures that businesses operate within a well-defined legal structure.
Here’s how the process of obtaining a CASP license works under MiCA, explained in practical terms and simplified into key stages.
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Determine whether your business qualifies as a CASP
The first step is to examine the nature of your services and determine if they fall under MiCA’s regulated activities. CASPs include businesses that offer custody of copyright-assets, operate copyright trading platforms, provide exchange services between copyright-assets and fiat currencies, execute client orders, manage copyright portfolios, or give copyright-related advice. If your platform or product delivers any of these services professionally to EU residents, you are required to obtain a CASP license. -
Choose an EU member state for registration
While a CASP license allows you to operate across all EU countries, your application must go through a single EU member state. This country will be considered your “home state,” and its national competent authority (NCA) will supervise your business. Some jurisdictions such as Lithuania, Estonia, and France are known for being more copyright-friendly, with clearer regulatory processes and responsive authorities. Your choice of jurisdiction can significantly affect the time and complexity of the licensing process. -
Establish a local legal entity within the EU
Your business must be formally incorporated in the EU country where you apply for licensing. This includes having a registered office, operational presence, and local management. Virtual-only or mailbox companies are not accepted. Regulators expect a physical presence that supports the scale and nature of your copyright services. This requirement also helps ensure that you’re truly committed to operating in line with EU laws. -
Appoint experienced and trustworthy management
The individuals running your business must meet “fit and proper” criteria. This means they should have the necessary expertise, clean legal backgrounds, and professional track records. Regulators will assess directors, compliance officers, and other key personnel to ensure they can be trusted to manage risks and follow regulations. You will likely need to submit CVs, background checks, and proof of relevant experience. -
Draft and submit a complete business plan
A comprehensive business plan is required to show regulators that your CASP is viable, compliant, and well-structured. Your plan should include a clear description of the services offered, your target market, operational model, projected revenues, risk assessments, and growth strategy. It must also detail how you’ll comply with MiCA’s requirements and manage regulatory responsibilities. Regulators rely on this plan to evaluate your preparedness and seriousness. -
Develop internal policies and operational procedures
Regulators require that your CASP have strong internal frameworks for areas like cybersecurity, anti-money laundering (AML), know-your-customer (KYC), data protection, and client asset safeguarding. You’ll need to prepare detailed documents outlining how you handle risks, detect suspicious activities, onboard clients, and ensure GDPR compliance. Having these systems in place is essential not only for licensing but also for long-term operational success. -
Meet financial and capital requirements
CASPs must demonstrate financial stability by meeting minimum capital requirements. The required amount varies depending on the services provided. For instance, companies offering copyright custody or trading may need higher initial capital than those giving advice or executing orders. The capital must be held in liquid funds and be readily available. This financial cushion reassures regulators that you can absorb losses, compensate clients, and remain solvent. -
Submit your application to the regulator
Once all documentation is prepared—including company registration papers, business plans, policies, and management information—you can submit the full application to the national authority of your chosen member state. The review process typically takes between 40 to 60 working days, though this depends on the quality of your submission and the regulator’s internal workload. Delays may occur if your application is incomplete or unclear. -
Cooperate during the review and follow-up phase
After submission, the regulator may request additional information, seek clarification, or conduct interviews with key personnel. It’s important to respond promptly and professionally. Authorities may also want to visit your offices or examine your IT systems. Clear communication and transparency at this stage help build trust and speed up the approval process. -
Receive the license and begin operations across the EU
Once your CASP license is granted, you can offer services throughout the EU with full regulatory recognition. You’ll be listed in the European Securities and Markets Authority (ESMA) registry and gain passporting rights. This means you won’t need to apply separately in every EU country—though you may still need to notify authorities where you plan to operate. Compliance with local consumer protection or tax rules may also be necessary. -
Maintain ongoing compliance and reporting
The responsibility doesn’t end once you receive the license. You’ll be required to submit regular reports, financial disclosures, and AML audits. You must also keep your systems and procedures updated as regulations evolve. Failing to comply with ongoing obligations could lead to warnings, fines, or even suspension of your license.
Securing a CASP license is a major achievement, but it requires careful planning, legal compliance, and operational readiness. It is more than just a legal formality—it’s a sign that your copyright business is ready to operate at a high standard and gain long-term trust from users and regulators alike. By taking a proactive and thorough approach to the licensing process, your business will not only meet regulatory requirements but also strengthen its reputation and growth potential across the European market.
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