Due to the steady spread of blockchain technologies, digital assets, and cryptocurrencies over the last decade, the issue of regulating this sphere has emerged. It is precisely because of the lack of proper control that the largest cryptocurrency scandals of modern times erupted (for example, FTX or Terra Luna). This was followed by the introduction of anti-money laundering laws, which strengthened oversight of the crypto sphere but did not completely eliminate many serious risks for market participants.

 

The main initiator of these changes was the European Union. It was here that, in September 2020, the draft law “On Markets in Crypto-Assets,” abbreviated as MiCA, was presented. It took less than 3 years to agree on all the details of the new regulatory document, which was then approved in spring 2023. The law came into force in December 2024. Below, we will take a closer look at this regulatory act, learn its purpose, and how to open a crypto business according to MiCA rules.

 

The Concept of MiCA and Its Significance

MiCA regulation introduced an updated framework for crypto-assets. The new regulation aims to protect consumers and investors, as well as to reduce risks to financial stability. Within the framework of the European Commission’s Digital Finance Strategy, MiCA establishes the EU’s framework for regulating:

 

  • The issuance of crypto-assets.
  • The custody and administration of crypto.
  • The operation of platforms and exchanges for trading crypto (for fiat or other cryptocurrencies).

A feature of MiCA is its direct application throughout the entire territory of the EU, without the need for member states to adopt national laws. This document complies with consumer protection principles and provides effective, coordinated access to a single innovative crypto-asset market.

 

Currently, it becomes possible to fully regulate the cryptocurrency sector with the following objectives:

 

  • Providing legal certainty by creating a reliable legal framework for the crypto sphere, which is not covered by existing financial services legislation.
  • Supporting innovation and fair competition to promote the development of crypto-assets by creating a safe and proportionate framework.
  • Protecting consumers, investors, and market integrity, taking into account risks associated with crypto.
  • Ensuring financial stability, including protective measures against potential risks to financial stability.

 

Important! The introduction of unified rules such as MiCA is also intended to prevent potential market fragmentation and establish standards of safety and transparency. Furthermore, it aims to strengthen trust in cryptocurrencies and fully unlock their potential in the European financial sector.

 

Main MiCA Requirements for Crypto Business

Before opening a crypto company according to MiCA rules, one should familiarize themselves with the conditions and obligations to ensure legal operation within the EU. Only by meeting all requirements is it possible to protect clients, partners, support market integrity, and maintain financial stability. A successful crypto business launch is possible only with thorough preparation for MiCA.

 

Licensing and Registration

At the core of the new regulation is the requirement for crypto-asset service providers (CASPs) to undergo official registration. A crypto business must apply to the competent authorities of the specific EU member state with a full set of documents. At the same time, it must meet suitability requirements – for example, the company must demonstrate its honesty and competence.

 

All activities related to cryptocurrencies in the EU are possible only with the appropriate license. To obtain it, the business must, among other things:

 

  • Appoint competent management.
  • Have internal security procedures.
  • Conduct transparent operations.

 

Capital Requirements

Companies working with crypto-assets must increase their authorized capital. This is a mandatory measure to ensure financial stability and protect clients. For example, custody service providers must deposit at least 125,000 euros into their corporate account.

 

Supervision and Reporting

Crypto business is allowed to operate on the European market only with a proper organizational structure that functions through effective policies and risk control procedures. For this purpose, employees responsible for compliance must be appointed, monitoring systems implemented, and regular inspections carried out. Among other things, it is important to develop a plan to maintain continuous business operation, and in case of unforeseen disruptions, enable prompt recovery. Organizations are required to regularly submit reports to regulatory authorities demonstrating financial soundness and compliance with standards.

 

Consumer Protection

MiCA rules are especially focused on ensuring reliable protection for every consumer and transparent provision of cryptocurrency services. Businesses are required to keep clients informed about all possible risks related to crypto-assets without misleading them. In this regard, there is an important requirement to implement reliable procedures for identity verification (KYC) and combating financial fraud (AML). The company must necessarily know important information about its client, monitor suspicious transactions, and cooperate with competent authorities. As for custody service providers, they must take even more stringent measures to ensure security, as well as acquire insurance or guarantee coverage of possible losses of clients’ assets in case of emergencies.

 

Which Types of Activities Fall Under MiCA

The new regulation concerns a wide range of crypto market participants, including:

  • Companies issuing or managing crypto-assets (stablecoins, tokens, electronic money).
  • Crypto exchanges engaged in cryptocurrency trading.
  • Crypto exchangers conducting exchange operations in all directions.
  • Consultants on cryptocurrency-related issues.
  • Companies providing technological services in the digital asset sphere.

 

MiCA requires obtaining a CASP license not only for new enterprises but also for those already operating in this field under the VASP permission.

 

Step-by-Step Plan to Open a Crypto Business According to MiCA Rules

The cryptocurrency industry is in a phase of rapid growth, creating not only opportunities but also challenges for entrepreneurs planning to launch a crypto business. Those wishing to open a cryptocurrency company should take into account many factors, ranging from registration specifics to implementation of necessary risk management systems. Below we explain how to open a crypto company according to MiCA rules.

 

Choosing a Jurisdiction

The choice of an appropriate EU jurisdiction is crucial for the success of any project. You should consider the effectiveness of regulation, tax consequences, and the business environment. Some countries practice a simplified application process, making registration and licensing fairly quick; others attract entrepreneurs with favorable tax rates or incentives. Also consider the experience of local authorities in crypto-asset regulation — this affects the efficiency of application processing and the quality of communication with the Regulator for successful compliance.

 

Document Preparation

The next step involves gathering detailed information about your business structure, management methods, financial condition, and security protocols. Documentation should include a business plan, organizational charts, and proof of the applicant’s financial stability. It is necessary to document your ability to manage risks associated with crypto-assets, as this is primarily what MiCA regulation aims to address.

 

Obtaining a CASP License

With a complete set of documents, you submit an application to the Regulatory Authority of the EU country where you are registering. This process may vary depending on the jurisdiction but generally involves a detailed review of your business model, financial indicators, and operational procedures. A key condition for successful passage of this stage is the ability to cooperate closely with regulatory bodies, as they may request additional documents or more detailed explanations of your activities. Upon approval, a MiCA license is issued, allowing you to conduct crypto activities under EU law.

 

Opening a Bank Account

Before starting crypto operations according to MiCA rules, another important step requiring preparation of an extensive document package is opening an account. It is important to understand that in most European jurisdictions, crypto business is still considered high-risk, so not all banks agree to open corporate accounts. A quite acceptable alternative in this situation is payment systems, through which business can also be comfortably conducted.

 

Launching Activities in Compliance with MiCA

After successfully obtaining a license, the company can immediately begin operations. EU legislation does not provide for a mandatory waiting period between license issuance and start of activity, naturally, provided all conditions for business launch are met. From the moment of starting work, the company is responsible for ongoing compliance with all MiCA requirements. Violations may result in fines or license revocation.

 

Problems When Obtaining a MiCA License

The main difficulty in most cases is the inability to independently understand how to start crypto activities according to MiCA rules and how to generally comply with the new regulatory requirements. Companies are required to have a thorough understanding of and comply with various standards regarding capital, KYC, AML, and management. These requirements differ depending on the type of crypto-assets or services provided. Therefore, the challenge for applicants is to stay informed about all legal intricacies. Understanding these complex issues is only possible with the support of experienced lawyers.

 

After licensing, companies face another challenge – ensuring continuous compliance with MiCA requirements. Licensed companies must fulfill ongoing obligations such as regular reporting, audits, and adherence to current regulatory standards. Whenever any innovations arise, timely adjustments to business processes must be made. To avoid fines and other risks, companies have to organize regular monitoring by engaging additional specialists, which entails extra financial expenses.

 

How Lawrange Can Help

Creating a cryptocurrency business according to MiCA norms is a complex process requiring professionalism and sufficient experience from the applicant. The Lawrange team specializes in providing personalized legal support, enabling your business to comply with MiCA regulatory requirements. We provide assistance at all stages of the company registration and licensing process, freeing you from unnecessary worries and time expenses. We are ready to take on all the details of ensuring compliance with the established requirements. At AA Lawrange, we will conduct risk assessments for KYC and AML protocols, help gather the document package not only for licensing but also for opening accounts with banks or payment systems. We will also ensure prompt responses to regulatory authorities’ requests so that the process of opening and launching your business goes as smoothly as possible.

 

FAQ

Which jurisdictions are most favorable for launching a crypto business in the EU?

When choosing a jurisdiction, we recommend paying attention, for example, to Estonia, known for its digital development policy and efficient licensing processes. Lithuania is also considered a fairly optimal option, offering comfortable conditions for fintech and cryptocurrency companies.

 

What fines are provided for non-compliance with MiCA?

The MiCA regulation provides for various fines for non-compliance with its provisions. The size of the sanctions depends on the specific violation as well as the laws of the particular EU country. Fines can reach significant amounts, including up to 5% of the company’s annual turnover.

 

What impact does cryptocurrency regulation have on the market?

Regulation contributes to stabilizing the crypto market, increasing trust in it, and its broader adoption. At the same time, it creates serious challenges for companies, especially small ones, which must constantly monitor compliance with requirements.

 

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