CASP License in Europe

As of January 1, 2025, new licensing rules have come into force in the EU for businesses engaged in cryptocurrency activities within the union. The concept of CASP (Crypto-Asset Service Provider) has replaced the previous VASP (Virtual Asset Service Provider) licenses. Therefore, current VASP holders, if they work with crypto-assets, must obtain new permits that comply with the updated MiCAR (Markets in Crypto-Assets Regulation) requirements.

If you also need to get a CASP License in the EU, now is the right time to start preparing for licensing. Existing providers simply need to update their permits by proving their compliance with the requirements and standards. New market entrants, however, will have to go through the CASP licensing process from scratch. And this is exactly what we will focus on today.

So, how to prepare for MiCA and obtain CASP status? Let’s explain!

What Is a CASP License?

A CASP License in Europe allows a business to carry out activities related to crypto-assets. That is, to:

• Offer exchange, sale, and purchase services for cryptocurrencies.
• Launch or manage ICOs and attract investments through the issuance of proprietary tokens.
• Provide asset custody services (cold and hot crypto wallets).
• Act as intermediaries that convert cryptocurrency into fiat and vice versa.
• Manage specialized platforms, develop and implement blockchain- and crypto-oriented software.

This permit (approved as the only license of its kind under the Markets in Crypto Assets Regulation) is issued both to VASP holders who previously had licenses to work with crypto and to new market players. At the same time, some entrepreneurs (related to crypto-assets) may not need it.

Who Needs a CASP License?

Everyone who provides services related to cryptocurrency within the union must obtain a CASP License in the EU. In other words, the licensing requirement applies to the following categories of entrepreneurs:

• Custodial service providers who ensure the safekeeping and administration of crypto-assets on behalf of clients.
• Providers of exchange services, including platforms where cryptocurrencies can be converted or transferred across blockchains.
• Administrators of crypto portfolios used for investment activities.
• Consultants specializing in crypto-assets who offer related services to EU clients.
• Providers of services directly related to cryptocurrencies in all forms.

As for those who do not need this license, these are only the entrepreneurs who do not work with cryptocurrencies or do, but their activities do not extend to the territory of the EU. Current market players should also take advantage of the grace period and go through the licensing process in time according to the new MiCA rules.

How Existing VASPs Should Prepare for Changes in Europe

VASP license holders have until July 1, 2026, to submit an application and obtain a CASP License in the EU. During this period, entrepreneurs must demonstrate that their business and operations comply with regulatory standards, AML/CFT practices, and more.

The preparation is not overly complicated or problematic and only requires:

• Having sufficient capital to operate in the specified CASP category.
• Undergoing an audit to confirm the legality of business operations.
• Submitting an application for a CASP License in the EU.

Note: Even under the most favorable circumstances, the review procedure takes at least six months. So, submit your request in advance to avoid fines or having to go through the licensing process from the beginning.

Not sure how to do it right? Use the consultations of AA Lawrange to prepare for the license transition.

Benefits of Getting a CASP License in Europe

If you have decided to get a CASP License in the EU, then you probably understand the advantages of operating in this jurisdiction. And there truly are many:

• Unlimited access to the European market with the possibility of gradual expansion into other regions. MiCAR, like the CASP license, is recognized in most progressive countries of the world, so you will be able to provide services to clients from all corners of the globe.
• An investment haven, as CASP license holders are more trusted. Thus, you will be able to attract financing and invest it in business development.
• Legalization of products in both local and foreign markets. This includes crypto-asset platforms, custodial services, and even physical devices (cold wallets).
• Access to the B2B segment. With CASP status, you can offer services not only to private but also to corporate clients, including converting crypto to fiat and vice versa.
• Freedom to work with the financial sector. Yes, with CASP, there is an opportunity to work with banking institutions, venture financing, and more.
• Reduced risks. That’s right – having a CASP license means operating legally within the EU. No fines, transaction blocks, or restrictions when choosing financial partners.

So, with such prospects and benefits, nothing should stop you from submitting an application for a CASP License in Europe. However, to get it approved, you will need to make efforts, particularly to demonstrate compliance with several requirements, regulations, and standards.

Capital Requirements for Crypto Asset Service Providers

The first requirement to obtain a CASP License in the EU is statutory capital. Its amount dynamically varies depending on the class of the enterprise engaged in crypto-asset activities. The classes, in turn, depend on the company’s business direction, services, and turnover. The following CASP gradation exists:

• Class 1 – from €50,000 in capital for companies involved in order processing, consulting, and placement of crypto-assets.
• Class 2 – from €125,000 in capital for enterprises that, in addition to Class 1 services, also exchange cryptocurrencies for fiat, third-party digital assets, or operate trading platforms.
• Class 3 – from €150,000 in capital for businesses that not only combine the functions of the first two classes but also provide services such as administering crypto-assets on behalf of clients, managing investment crypto portfolios, etc.

The statutory capital must be deposited in at least one bank account registered in a European Union country.

However, this is not the only requirement for licensing candidates under MiCAR standards.

Requirements for Obtaining a CASP License in Europe

All those applying for a CASP License in the EU must meet a fairly extensive list of requirements, namely:

• Have legal registration and a physical address in one of the EU member countries.
• Hire at least one director and key employees responsible for AML compliance, such as a CCO, CRO, and MLRO, who are EU residents.
• Deposit the statutory capital, corresponding to the company’s class, into a bank account opened in one of the trusted financial institutions of the European Union.
• Prove the qualifications and reputation of the company’s key management staff.
• Ensure strict compliance with AML/KYC policies, with proactive monitoring of their implementation at all stages of the company’s operation.
• Build a powerful, reliable, and secure digital infrastructure that meets European standards.

Additionally, a fairly large package of documents must be prepared for the application, according to the template established by MiCAR.

How to Prepare for a MiCA CASP License Application

To get a CASP License in the EU, you should properly prepare for the application process, namely:

• Register a company with selected services and class.
• Find and hire personnel.
• Prepare documents, including the company’s charter.
• Create a bank account.
• Undergo audit procedures according to the algorithm specified in MiCA.

This is a rather simplified algorithm, but even it is enough to understand the complexity of the process. Therefore, you may need the assistance of experts familiar with EU legislation. For example, the AA Lawrange team, which will not only prepare you for registration and licensing but also support you until the license is obtained. And believe us, you will need it.

CASP Licensing Process Step by Step

Still determined and want to obtain a CASP License in the EU? Well, take a look at the steps that make up the licensing process:

• Choose jurisdiction.
• Register legal entity.
• Prepare documentation.
• Set up infrastructure and hire key staff.
• Submit application to regulator.
• Obtain approval and license.

Looks simple? Well, let’s dive into the details of each step listed.

Choose Jurisdiction

To obtain a CASP License in Europe, you need to choose a jurisdiction — meaning one of the member countries of the European Union. We will discuss the best options and advantages of each of them in the following parts of the material. But for now, let’s look at the differences that can significantly impact your business activity:

• Requirements for the license applicant. Although the MiCAR regulation is standard across the EU, each European country also has its own requirements that differ depending on the legal landscape.
• Costs of forming and maintaining a company. Some EU countries offer preferential conditions for businesses working with crypto-assets, while others operate under more conservative standards.
• Tax burden. Similar to the previous point, some jurisdictions offer preferential periods or lower tax rates, while others do not.

Therefore, the first step is selecting a country to register your company in. This will determine the next stages, so choose the jurisdiction that offers the most advantages for your type of activity. Now, let’s move on to the next steps.

Register Legal Entity

Once you have chosen the jurisdiction, you need to establish a legal entity in the region to obtain a CASP License in the EU by properly registering it. That means:

• Submitting an application to the local regulator responsible for issuing business operation licenses.
• Purchasing or renting an office, the physical address of which will be the company’s address.
• Opening a bank account and depositing an amount that meets the minimum requirements for the specific type of company.

A unique name, a set of documents, the charter, business plan, and company operation model are also required — but more on that later.

Prepare Documentation

The list of requirements for obtaining a CASP License in the EU includes quite an extensive set of documents that must be prepared in advance, namely:

• General corporate documentation, such as a certificate of registration, charter, UBO (Ultimate Beneficial Owner), passports of key stakeholders.
• Organizational structure, for example, an organogram, job descriptions for the CEO, CFO, CTO, CCO, MLRO, etc., CVs and certifications of top managers.
• Business documents, in particular a 3-year business plan and a memorandum describing CASP operations.
• Proof of capital with a certificate confirming the availability of funds in the account and information about their origin.
• Policy documents, such as AML/CFT, KYC, conflict of interest management, asset protection, information system security, etc.
• IT infrastructure with descriptions of the technological platform, integrations with banks, blockchain, etc.
• Legal documents, including agreement templates, privacy policy, and so on.

Please note: this is only a general description of the documents required for registration. The actual list will be unique for each entrepreneur.

Set Up Infrastructure and Hire Key Staff

To obtain a CASP License in the EU, you must also meet some specific MiCAR requirements — particularly those related to infrastructure and personnel. For example:

• Rent or purchase an office in one of the European Union countries.
• Hire a director and top managers directly in the EU, and prepare information confirming that their skills, experience, and reputation meet regulatory standards.
• Ensure that the organization strictly complies with all key policies specified in MiCA.

Only after fulfilling these requirements can you begin the application process with the regulator.

Submit Application to Regulator

To get a CASP License in the EU, you must complete all previous steps and fill out the application form provided by the regulator. Make sure all the information provided is accurate and that the document package matches the list specified in the requirements. Note that the preparation process itself may take around 4–6 months, so you should not expect a quick response from the regulator.

Obtain Approval and License

Even if you have correctly and perfectly completed the application, submitted all necessary documents, and have an impeccable reputation, you will still need to wait for the results of the application review. Typically, the process of analyzing and verifying candidates for a CASP License in the EU takes about 3 months. During this period, additional requests, audits, verifications, etc., may occur.

If any issues arise with the application, it may simply be rejected or returned for revision, with notes indicating which points need to be corrected, clarified, and so on.

Popular European Jurisdictions for Obtaining a CASP License

Let’s return to the issue of choosing a jurisdiction to obtain a CASP License in Europe. In general, you are free to register a company in any EU country, but it is not always equally simple or advantageous. In short, several regions of Eastern Europe are better suited for working with crypto-assets than others. For example:

• Estonia.
• Lithuania.
• Poland.
• Czech Republic.

Why these particular countries? There are enough reasons: relatively low taxes, preferential working conditions for tech companies, and effective legal landscapes. Let’s take a closer look at each of the mentioned options.

Estonia

The Estonian Financial Intelligence Unit considers applications for a CASP License in the EU within 2–4 months, but it uses an enhanced mechanism to verify candidates’ compliance with the regulator’s requirements. Depending on the services the company intends to provide, it may expect favorable working conditions.

Lithuania

The Bank of Lithuania reviews applications in about 65 days, but requires the applicant for a CASP License in the EU to hire local CEO, CCO, and MLRO. The rest of the requirements and standards correspond to the previous jurisdiction, as do the support programs for tech startups launching their activities in Europe starting from Lithuania.

Poland

Although the Komisja Nadzoru Finansowego (KNF) accepts applications for a CASP License in Europe, the country’s legislation is still adapting to MiCA regulations. As for the requirements, they are standard: physical presence in the country, local directors, and capital corresponding to the CASP class.

Czech Republic

The Czech National Bank (CNB) also provides the possibility to obtain a CASP License in the EU, following the standard rules for company registration in the jurisdiction. The same capital and company placement requirements apply, along with some benefits for the niche.

Formally, the mentioned jurisdictions differ only in the time it takes to process applications and the complexity of candidate checks. Also, they typically offer lower commissions, fees, and company servicing charges compared to, say, Western European countries.

Responsibilities After Licensing

Even with a CASP License in the EU in hand, you shouldn’t relax. The fact that you obtained a license means that things will only get more difficult going forward. Post-licensing processes for CASPs include:

• Constant compliance with the MiCA regulation, service provision conditions, control of activities within the CASP class, etc.
• Maintenance and development of AML/CFT/KYC policies and informing the competent authorities about detected cases of suspicious customer activity.
• Ongoing reporting and audits conducted within the timelines set by the MiCA regulation.
• Protection of clients’ rights and monitoring the legality of their operations.
• Organization of a secure digital environment to protect transactions, sensitive information, corporate data, etc.

Let us remind you, these are not optional wishes, but obligations for every entrepreneur who holds CASP status. Ignoring the provisions, failing to meet the requirements, deviating from standards, or engaging in illegal activities will not only result in license revocation but also in administrative or even criminal proceedings.

CASP License Application Timeline and Costs

We know that you are planning to obtain a CASP License in the EU, so we’ve prepared information for you regarding the time you’ll spend on the procedure, as well as an approximate project cost estimate.

Let’s start with the first — namely, the timeline:

And let’s move on to the second part, namely the costs:

So, within 3–6 months and with €60,000–€200,000, you will be able to get a CASP License in the EU. However, in practice, everything will mostly depend on the jurisdiction in which you start operating. And yes, you might need help from experienced lawyers to go through the process as quickly and smoothly as possible.

Why You Should Choose Lawrange

The AA Lawrange team are legal experts with many years of experience working with EU legislation. We will not only help you prepare for the challenges of obtaining a CASP License in Europe but also provide full support throughout the procedure.

Moreover, we will become a reliable partner that ensures your business complies with all MiCA requirements and local regulations. So, shall we begin our cooperation now?

Conclusions

The new MiCA rules and requirements for candidates wishing to get a CASP License in the EU create a number of challenges for entrepreneurs. It doesn’t matter whether you are already working with a VASP license or are only beginning your journey toward establishing yourself in the crypto asset market — you must prepare in advance.

And it is the support from AA Lawrange that will become the shoulder you can lean on when organizing the CASP license acquisition process. Ready to enter the market quickly and start legally working with crypto assets? Contact our manager to initiate the project!

FAQ

ORDER REGISTRATION OF CASP LICENSE IN EUROPE Telegram bot for quick communication with us