MiCA (Markets in Crypto-Assets) Compliance Setup

MiCA Compliance Setup (Markets in Crypto-Assets)

MiCA (Regulation (EU) 2023/1114) — the first comprehensive EU regulatory framework for crypto-assets, fully effective from December 2024. This is not just another national law — it's a unified passporting regime for the entire EU, meaning obtaining one license gives access to all 27 member states.

Classification Under MiCA

MiCA covers three token categories:

Asset-Referenced Tokens (ART): stablecoins pegged to a basket of assets (currencies, commodities). Requirements: license from national competent authority, reserve assets, redemption rights, governance requirements.

E-Money Tokens (EMT): stablecoins pegged to a single fiat currency (USDC, USDT analogs). Requires either existing EMI license or credit institution license. Strict reserve requirements (100% in risk-free assets).

Other Crypto-Assets (including utility tokens): softer regime, but requires White Paper and registration with NCA (National Competent Authority).

CASPs (Crypto-Asset Service Providers): exchanges, custodians, brokers — licensing as CASP. Analog to MiFID for crypto.

CASP License Requirements

For CASP the most critical technical requirements:

Prudential requirements: minimum capital €50,000-€150,000 (depending on services). Professional indemnity insurance if below capital requirements.

Governance: fit and proper management (biography + clean criminal record for directors), written governance arrangements.

Custody (Art. 70): segregation of client assets from own. Technically: separate wallets for each client or omnibus wallets with reconciliation system. Internal controls for key management.

// Technical requirements for custody
interface CASPCustodyRequirements {
  assetSegregation: boolean;       // MiCA Art. 70(1)
  reconciliationFrequency: string; // at least daily
  backupProcedures: string;        // cold storage + HSM
  keyManagement: "HSM" | "MPC" | "hardware_wallet"; // hardware-based
  auditTrail: boolean;             // immutable audit log
  clientReporting: string;         // quarterly client statements
}

Complaint handling: procedure for complaint processing, SLA for response (15 business days).

Conflict of interest policy: written policy for managing conflicts of interest.

Marketing communications: all marketing materials must be "fair, clear and not misleading". MiCA prohibits unsolicited communications without consent.

White Paper Requirements (Art. 6)

For utility tokens: White Paper with mandatory sections. This is a legal document, not marketing:

• Information about issuer (registration, structure)
• Description of project and token use
• Rights and obligations of holders
• Underlying technology (auditable smart contract)
• Risks (comprehensive risk factors)
• Environmental impact (energy consumption)
• Financial information

White Paper is registered with NCA. Responsibility for inaccurate information — issuer and management.

AML/CFT Under MiCA

MiCA works in conjunction with AMLA (Anti-Money Laundering Authority) — new EU AML regulator. Requirements:

• CDD for all customers (KYC)
• Transaction monitoring
• Travel Rule compliance (EU Transfer of Funds Regulation applies to crypto)
• SAR submission to national FIU

Technical Systems for MiCA Compliance

// Example of compliance system structure
interface MiCAComplianceSystem {
  // CASP licensing requirements
  customerOnboarding: {
    kycProvider: "sumsub" | "onfido" | "jumio";
    pepScreening: boolean;
    sanctionsScreening: boolean;
    enhancedDueDiligence: "manual" | "automated";
  };
  
  // Custody (Art. 70)
  assetManagement: {
    segregationType: "per_client" | "omnibus_with_reconciliation";
    reconciliationFrequency: "realtime" | "hourly" | "daily";
    keyManagement: "HSM" | "MPC";
    auditLog: boolean;
  };
  
  // Travel Rule (EU TFR)
  travelRule: {
    threshold: 0; // In EU TFR: €0 threshold (all transfers)
    provider: "notabene" | "sygna" | "veriscope";
    unhostedWalletPolicy: string;
  };
  
  // Reporting
  regulatoryReporting: {
    periodicReports: string[];
    incidentNotification: string; // 4 hours for major incidents
    complaintsRegister: boolean;
  };
}

Travel Rule Peculiarity in EU

Key difference from FATF: EU Transfer of Funds Regulation (TFR) applies to ALL transfers without a threshold, not just above €1,000. VASP must transmit originator/beneficiary information for each transfer between VASPs.

Timeline for CASP License

MiCA compliance setup includes gap analysis, policy development, technical systems and support with NCA submission. Timeline to application: 3-4 months.