The draft law on cryptocurrencies – conditions for obtaining a CASP permit

In this article we describe what conditions must be met by an entity that will want to obtain a permit to operate as a service provider in the scope of cryptoassets. We describe the requirements set forth in the MiCA taking into account the draft of the Polish Law on Cryptocurrencies.

Conditions for the provision of cryptocurrency services

The conditions for obtaining a license derive primarily from Regulation (EU) 2023/1114of the European Parliament and the Council on cryptoasset markets (hereinafter: “MiCA”) and the Polish law, which is currently in the drafting stage. On February 23, 2024, the Polish government published a draft Law on Crypto-Actives (hereinafter: the “Draft”), which aims to adapt Polish law to the implementation of the MiCA.

First of all, it should be pointed out that according to Article 59 of the MiCA, it is prohibited to provide crypto services in the European Union without a license. In turn, acting without the appropriate authorization, under the draft Polish Law on Cryptocurrencies, is punishable by a fine of up to PLN 10,000,000, or imprisonment for up to 2 years, or both.

How to obtain a permit to trade in cryptocurrencies?

In order to obtain a permit to operate as a service provider in the scope of cryptoassets, it is necessary to submit an appropriate application and provide all the information and documents required by the MiCA Regulation. It is worth noting that the place of residence of the applying entity must be in an EU member state. In addition, the place of actual management must be in the Union, and at least one of the directors must be a resident of the Union. According to the draft Polish Crypto Act, the application is reviewed by the Financial Supervision Authority, which is also the supervisory authority over the crypto market in Poland.

According to Article 62 of the MiCA, the application for authorization shall include:

• the trade name of the applicant,
• website address,
• contact email address,
• telephone number,
• physical address,
• legal form of the applicant,
• the memorandum or articles of association, if applicable
• program of activities specifying the scope of services ,
• documents confirming compliance with prudential requirements, including capital requirements – depending on the scope of services provided, minimum capital requirements range from €50,000 to €150,000,
• description of management principles,
• evidence that the managers provide guarantees for the proper and stable operation of the company,
• identity of shareholders or stockholders,
• description of internal control mechanisms,
• technical documentation of ICT systems and security solutions,
• description of the procedure for extracting crypto-assets and client funds,
• description of the procedure for handling complaints,
• description of the order execution policy,
• the type of cryptoassets to which the cryptoasset service applies.
• Approval of the white paper by the FSC is subject to a fee of €3,000.

If you operate as a CASP/VASP in Poland and want to ensure your business is compliant with the upcoming regulations, contact our law firm for a consultation.