Updated: 02.07.2024
What is a CASP license in crypto business?
Under MiCA regulation, those companies, who wish to provide services related to cryptocurrency will soon need to obtain a CASP license to legally operate crypto business in the EU.
If you are seeking to obtain a crypto license for your crypto business, you should first familiarise yourself with the additional information provided in this article.
Companies that are currently categorized as VASPs (virtual asset service providers) will be re-categorized as CASPs(crypto asset service providers).
CASP license for crypto business will be required for the following services:
- providing custody and management services for crypto assets on behalf of clients,
- managing a trading platform for crypto assets,
- exchanging crypto-assets for FIAT currencies,
- exchanging crypto-assets for other crypto-assets,
- executing purchase orders for cryptocurrency assets,
- placement of crypto assets on the market,
- accepting and transmitting orders for crypto assets,
- providing advice on crypto-assets,
- managing a portfolio of cryptocurrency assets,
- providing of crypto asset transfer services.
CASP license will allow a company to provide its services across all EU countries.
When will the MiCA regulation come into force in crypto businesses?
MiCA comes into force for CASPs on December 30, 2024. Those entities that have not engaged in cryptocurrency activities until that date will have to apply for CASP license before they start operating.
Current VASPs (entities registered in Register of virtual currency activities) will be allowed to provide services under VASP license during the grace period – until June 30, 2025 (estimated date).
What is the deadline for cryto providers to apply for new CASP license?
This date has been set for Polish entities as 30 June 2025, in accordance with Article 150 of the draft Polish crypto-assets Act. At the same time, if entities listed in the VASP register submit a complete application for a CASP licence by 1 May 2025 and receive confirmation of the completeness of the submitted application, they may operate the services listed in the VASP register until the completion of the proceedings.
This means that entities included in the VASP register that apply for a CASP licence by 1 May 2025 may effectively operate beyond 30 June 2025. The dates given cannot be considered final as the law is still in the legislative process.
Crypto market in Poland
As per Fintech Foundation report of 2023, the Polish FinTech ecosystem, though relatively young, is already well-developed and set for further growth. Poland is the biggest financial services market in CEE which will likely allow it to attract talent and investment from the entire region. Macroeconomic forecasts show space for future growth.
As of 14 of June, 2024, there are 1,175 entities actively registered VASPs in the Register of virtual currency activities. Not all of crypto companies are operational though.
According to the report ‘Popularity of cryptocurrencies in Poland’ issued in 2023, more than 94% of Poles surveyed have heard of cryptocurrencies, although among them only 6.2% describe their knowledge as high or very high.
Cryptocurrencies are mainly used as investment and speculative assets, with more than half of the respondents using them for this purpose. They are much less frequently used as a tool to participate in blockchain-based projects, to purchase products and services or to transfer funds.
Median of declared funds allocated by Poles to investments in cryptocurrencies is PLN 1,000, the average is PLN 7642, and the average when excluding the 5% extremes is PLN 5149.
Men invest in cryptocurrencies three times more often than women. Young people (under the age of 34) account for 41% of all those declaring crypto-asset ownership. Furthermore, the prevalence of cryptocurrency ownership also increases with education level.
What services can you provide under CASP license?
A CASP crypto license can be issued for one, many or all of services in crypto industry:
- providing custody and administration of crypto-assets on behalf of clients – the service means your crypto Company will be safekeeping or controlling, on behalf of its clients crypto-assets or of the means of access to such crypto-assets, where applicable in the form of private cryptographic keys,
- operation of a trading platform for crypto-assets – which means management of one or more multilateral systems, which bring together or facilitate the bringing together of multiple third-party purchasing and selling interests in crypto-assets, in the system and in accordance with its rules, in a way that results in a contract, either by exchanging crypto-assets for funds or by the exchange of crypto-assets for other crypto-assets,
- exchange of crypto-assets for funds – service consist of concluding purchase or sale contracts concerning crypto-assets with clients for funds by using proprietary capital,
- exchange of crypto-assets for other crypto-assets – service consist of concluding purchase or sale contracts concerning crypto-assets with clients for other crypto-assets by using proprietary capital,
- execution of orders for crypto-assets on behalf of clients – means the conclusion of agreements, on behalf of clients, to purchase or sell one or more crypto-assets or the subscription on behalf of clients for one or more cryptoassets, and includes the conclusion of contracts to sell crypto-assets at the moment of their offer to the public or admission to trading,
- placing of crypto-assets – means the marketing, on behalf of or for the account of the offeror or a party related to the offeror, of crypto-assets to purchasers,
- reception and transmission of orders for crypto-assets on behalf of clients – means the reception from a person of an order to purchase or sell one or more crypto-assets or to subscribe for one or more crypto-assets and the transmission of that order to a third party for execution,
- providing advice on crypto-assets – means offering, giving or agreeing to give personalised recommendations to a client, either at the client’s request or on the initiative of the crypto-asset service provider providing the advice, in respect of one or more transactions relating to crypto-assets, or the use of crypto-asset services,
- providing portfolio management on crypto-assets – means managing portfolios in accordance with mandates given by clients on a discretionary client-by-client basis where such portfolios include one or more crypto-assets;
- providing transfer services for crypto-assets on behalf of clients – means transfering, on behalf of a natural or legal person, crypto-assets from one distributed ledger address or account to another.
The scope of services to be obtained during crypto licensing depends on your company’s business model. The scope of services provided has a direct impact on the capital requirements your company will have to meet.
Who can apply for CASP license?
The following entities will be able to provide cryptocurrency services under MiCA:
- companies that have been granted CASP license under art. 63 MiCA [in practice in Poland that most common would be limited liability company (spółka z ograniczoną odpowiedzialnością) or join-stock company (spółka akcyjna)] – hereinafter called “Authorized CASPs”,
- a credit institution, central securities’ depository, investment firm, market operator, electronic money institution, UCITS management company, or an alternative investment fund manager that is allowed to provide crypto-asset services pursuant to Article 60 of MiCA.
What are the requirements for CASP license applicants?
CASP applicants (art. 63 of MiCA) have to comply with the following:
- must be headquartered in the Member State in which they carry out at least part of their crypto services activities,
- management board must be in the EU, and at least one of the directors must be resident in the EU,
- meet minimum capital requirements,
- provide internal documentation required under MiCA,
- have management board of a good repute, clean criminal record, and possess the appropriate knowledge, skills and experience, both individually and collectively, to perform their duties in crypto market.
Authorized CASP license process – step by step
- The company submits an application for a CASP license to the competent authority of the home state (for Polish entities, this is the Financial Supervision Authority).
- Within 5 working days, the license authority sends an acknowledgement of receipt of the application.
- Within 25 working days of receipt of the application, the supervisory authority assesses whether the application is formally complete. If it is not, the authority calls on the applicant to complete the documentation, setting a deadline for completion. If the supplementary documentation is not complete by the deadline, the supervisory authority may refuse to process the application.
- If the application is complete, then the supervisory authority will notify the applicant and start assessing the content of the documents,
- After 20 days (half of the assessment) authority can summon for additional information (deadline maximum 20 days). The remaining 20 days of assessment start from the day the response is forwarded to KNF.
- The whole process should take 40 business days, concluding with the decision to grant or revoke the license.
When calculating deadlines, it is necessary to take into account the time required for the circulation of correspondence, so the time indicated in MiCA may be extended.
What is the cost of the CASP licensing process?
The planned cost of obtaining CASP license is 4.500 euro (equivalent in PLN). As of June 14th, 2024, the amount is yet to be officially confirmed, as it is currently indicated in the art. 40 (1) of the draft of Polish cryptoasset Act, which is still in the legislative process.
Additionally, under art. 41 (1) Polish cryptoasset Act CASP pay an annual contribution to cover the costs of crypto-asset market oversight determined by the average value of crypto-asset service revenues over the last three fiscal years preceding the year for which the payment is due, in an amount not greater than 0.5% of this average, but not less than the PLN equivalent of 750 euro.
A crypto-asset service provider starting to provide crypto-asset services shall pay the first fee for the year following the year in which it started to provide such services.
General overview of internal procedures required for CASP license application
- a programme of operations,
- proof that the applicant crypto-asset service provider meets the requirements for prudential safeguards set out in Article 67 of MiCA,
- a description of the applicant crypto-asset service provider’s governance arrangements,
- proof that members of the management body of the applicant crypto-asset service provider are of sufficiently good repute and possess the appropriate knowledge, skills, and experience to manage that provider,
- the identity of any shareholders and members, whether direct or indirect, that have qualifying holdings in the applicant crypto-asset service provider and the amounts of those holdings, as well as proof that those persons are of sufficiently good repute,
- a description of the applicant crypto-asset service provider’s internal control mechanisms, policies and procedures to identify, assess and manage risks, including money laundering and terrorist financing risks, and business continuity plan;
- the technical documentation of the ICT systems and security arrangements, and a description thereof in nontechnical language,
- a description of the procedure for the segregation of clients’ crypto-assets and funds;
- a description of the applicant crypto-asset service provider’s complaints-handling procedures;
- where the applicant crypto-asset service provider intends to provide custody and administration of crypto-assets on behalf of clients, a description of the custody and administration policy;
- where the applicant crypto-asset service provider intends to operate a trading platform for crypto-assets, a description of the operating rules of the trading platform and of the procedure and system to detect market abuse;
- where the applicant crypto-asset service provider intends to crypto exchange assets for funds or other crypto-assets, a description of the commercial policy, which shall be non-discriminatory, governing the relationship with clients as well as a description of the methodology for determining the price of the crypto-assets that the applicant cryptoasset service provider proposes to exchange for funds or other crypto-assets;
- where the applicant crypto-asset service provider intends to execute orders for crypto-assets on behalf of clients, a description of the execution policy;
- where the applicant crypto-asset service provider intends to provide advice on crypto-assets or portfolio management of crypto-assets, proof that the natural persons giving advice on behalf of the applicant cryptoasset service provider or managing portfolios on behalf of the applicant crypto-asset service provider have the necessary knowledge and expertise to fulfil their obligations;
- where the applicant crypto-asset service provider intends to provide transfer services for crypto-assets on behalf of clients, information on the manner in which such transfer services will be provided;
- the type of crypto-asset to which the crypto-asset service relates.
Requirements towards CASP
Requirements towards Management Board of CASP
Under the art. 68 (1) of MiCA CASP’s management board have to be good repute and possess the appropriate knowledge, skills and experience, both individually and collectively, to perform their duties.
In practice, the following documents will need to be submitted along with the CASP application (RTS requirement):
- clean criminal record,
- statement that board member is not under penalties imposed under the applicable commercial law, insolvency law and financial services law, or in relation to anti-money laundering, and counter-terrorist financing, to fraud or to professional liability,
- a curriculum vitae (10 years back) stating the person’s relevant education, professional training and professional Experience including name and nature of all organizations for which the individual has worked and the nature and duration of the functions performed; particularly any activities within the scope of the position sought relevant, for positions held in the previous 10 years: details on activities, all internal decision-making powers held and the areas of operations under control,
- statement on amount of time dedicated to perform their duties,
- the member’s full name, place, and date of birth and address,
- the position held or to be held by the person, including whether the position is executive or non-executive, the (planned) start date, the duration of the mandate (where applicable) and the person’s key duties and responsibilities;
- statement on any refusal of registration, authorization, membership, or license to carry out a trade, business, or profession; or any expulsion by a regulatory or government body or by a professional body or association,
- statement on the person’s dismissal from employment or a position of trust, fiduciary relationship, or similar situation,
- a description of any financial and non-financial interests or relationships of the person and his/her close relatives to members of the management body and key function holders in the same institution, the parent institution and subsidiaries and shareholders. Such description shall include any financial interests, including crypto assets, other digital assets, loans, shareholdings, guarantees or security interests, whether granted or received, commercial relationships, legal proceedings and any position of political influence held over the past two years.
From a practical standpoint, it should be noted that the Polish KNF issued a resolution on April 14, 2022, indicating that members of the management (shareholders) with ties to the Russian Federation or the Republic of Belarus in the form of origin (citizenship) from these countries, concentration of their social, professional or business activity in these countries, or close personal or business ties with entities concentrating their activity there, will be treated by the KNF as a substantial doubt that the activityof the licensed entity will be conducted in a proper manner – law-abiding, honest, transparent, prudent and stable.
Since CASP will fall under KNF supervision, we can expect that resolution to be binding toward CASP as well.
Requirements towards shareholders of CASP
Shareholders and members, whether direct or indirect, that have qualifying holdings in crypto-asset service providers shall be of sufficiently good repute. In particular, they shall not have been convicted of offenses relating to money laundering or terrorist financing or of any other offenses that would affect their good repute.
Document checklist for shareholders should include:
- clean criminal record,
- statement that shareholder is not under penalties imposed under the applicable commercial law, insolvency law and financial services law, or in relation to anti-money laundering, and counter-terrorist financing, to fraud or to professional liability,
- an ownership structure chart of the applicant, including the breakdown of its capital and voting rights and the names of the shareholders with qualifying holdings.
Requirements towards CASP employees
Under art. 68 (5) of MiCA CASP shall employ staff with the knowledge, skills and experience necessary to perform their assigned duties, taking into account the scale, nature, and scope of the crypto services provided.
In Poland, specific criteria to be met by staff will be regulated separately, by a national regulation issued by Minister responsible for financial institutions, as indicated by draft of the Polish Act on crypto-assets law.
Capital requirements for CASP
Depending on the scope of planned services as CASP, your company will have to secure funds (minimal capital), as per the table below. The aim of minimal capital is to ensure the Company has enough financial backing to operate safely and reliably.
| Crypto service providers | Type of crypto services | Minimal capital |
| Class 1 | Crypto-asset service provider authorized for the following cryptoasset services:
|
EUR 50,000 |
| Class 2 | Crypto-asset service provider authorized for any crypto-asset services under class 1 and:
|
EUR 125,000 |
| Class 3 | Crypto-asset service provider authorized for any crypto-asset services under class 2 and operation of a trading platform for crypto-assets | EUR 150,000 |
CASP FAQ
Does CASP license enable to operate only in Poland or other countries?
This cryptocurrency license will enable passporting rights, so once the applicant is approved in one member state, then your company can provide the same services across the EU without added licensing.
Does Polish-licensed CASP need the physical presence in the territory of a host Member State?
CASPs that provide crypto-asset services on a cross-border basis are not required to have a physical presence in the territory of a host Member State of the EU.
Reverse solicitation under MiCA
If a client established or located in the Union initiates on its own exclusive initiative the provision of a crypto service or the conduct of crypto activities by a CASP from a third country. The CASP there does not need to obtain a license to operate in the EU.
How long does it take to get CASP license
It takes around 3 calendar months at minimum.
Are there any transactional limitations for CASP?
No, there are no limitation on volume and number of transactions conducted by CASP.
Can I continue to provide services as a VASP (on the basis of registration in the Polish register of virtual currency activities) after the MiCA comes into force?
Yes – but for a limited period of time. Companies, that has been registered in VASP register in Poland, and providing services before December 30, 2024 will be able to continue to do so until June 30, 2025 (shorter period than MiCA provide) – estimated date, as the draft of Polish crypto-assets act is still in legislative process.
On January 1st, 2026 the VASP register will cease to exist.
What is a CASP license, and why is it important for crypto businesses in the EU?
A CASP license, under the MiCA regulation, is a mandatory authorization for companies wishing to provide cryptocurrency services in the EU.
It is crucial for crypto businesses to legally operate and offer services such as managing crypto trading platforms, cryptocurrency exchange, and providing custody for crypto-assets.
This crypto license ensures compliance with the EU’s robust regulatory framework and facilitates secure and reliable cryptocurrency transactions across all member states.
How can a crypto company obtain a CASP license?
To obtain a CASP crypto license, a cryptocurrency company must submit an application to the Financial Supervision Authority.
The licensing process involves meeting several regulatory requirements, including minimum capital requirements, internal documentation, and proof of the management board’s good repute and expertise.
The application undergoes a thorough assessment by the regulatory authorities, and the entire licensing procedure typically takes around 3 calendar months.
What are the requirements for cryptocurrency companies applying for a CASP license under MiCA regulation?
Cryptocurrency companies applying for a CASP license under MiCA regulation must meet several requirements:
- Headquartered in an EU member state.
- Management board based in the EU, with at least one director resident in the EU.
- Compliance with minimum capital requirements.
- Submission of internal documentation and a detailed description of governance arrangements.
- Good repute and relevant expertise of the management board.
- Adequate internal control mechanisms, including policies for combating money laundering and ensuring business continuity.
These requirements ensure that crypto businesses operate within a secure and regulated environment, contributing to the integrity of the cryptocurrency industry.
Contact us to ensure compliance with the latest fintech and cryptocurrency regulations. Leveraging our extensive experience in fintech, small payment institutions, and banking, we provide a comprehensive, one-stop shop solution to meet all your regulatory needs. Let us handle everything for you efficiently and professionally.
