Navigating MiCA Compliance for Crypto Asset Service Providers
Nearly two years on from Markets in Crypto-Assets (MiCA’s) full application deadline on December 30, 2024, its impact has been transformative. With 15 crypto-related firms having obtained CASP authorisation, the EU has firmly established itself as the first major jurisdiction with a crypto regulatory framework for digital assets.
Written by a human
MiCA came with clear and ambitious objectives to integrate digital assets into the EU’s financial system safely, valuing investor protection and market integrity. But the path to compliance does present some hurdles, including the high barrier to entry, and detailed (costly) implementation.
With the European crypto market projected to reach €1.8 trillion in value in 2025, crypto asset service providers (CASPs) must understand the importance of regulation. With non-compliance carrying penalties of up to €5 million, the EU is serious about protecting the integrity of this sector.
The devil in the details: MiCA compliance
To become a MiCA-licensed organization while offering crypto-asset services, firms must satisfy several requirements of the EU crypto regulation.
How to comply with MiCA for CASPs in the EU:
- Get authorization
- Ensure they have enough capital reserves
- Determine their governance framework
- Meet AML/CTF rules
Authorization
Applying for authorization relies on operating within the EU (either originally, or having a branch there), and meeting ‘fit and proper’ requirements. This is (hopefully) something that CASPs are already doing as part of the wider governance framework - ensuring that the board and senior management are well-qualified and monitored in their roles.
Capital Reserves
MiCA compliance requires firms to have a permanent minimum capital requirement of between €50,000 and €150,000. The actual amount depends on the firm’s type and structure.
Alongside this, CASPs must retain 25% of their Quarterly Fixed Overheads in cash. For established companies, this can be calculated by simply looking at the overhead costs from the previous year. But for new organizations, businesses should consider creating a detailed business plan with anticipated costs and expenses, as well as opening a line of communication with their national authorities for support. In most cases, an insurance policy will also provide a buffer, if required.
Governance framework
MiCA regulation asks for robust governance frameworks to be put in place, in order to prevent insider trading and biased decision-making.
Examples of strong governance include:
- Written policies around risks: such as how client assets are held, and the arrangements for safeguarding these assets and/or their private keys
- Role-based definitions: such as key responsibilities for the risk officer, compliance officer and Head of IT during a cyberincident
- Identify potential conflicts of interest: a CASP that operates an order-matching service has a conflict with its users if it is also making markets or otherwise trading as principal against other users in that market.
- Create business continuity plans: in alignment with the Digital Operational Resilience Act (DORA), required from January 2025, with special attention to plans in case third parties go down
- Implement internal controls: such as an employee communications tracking system to check for insider trading, including in coded language
- Audit procedures: such as the automatic recording of all trades, stored in a chronological order and in an easily-searchable format
AML/CFT rules
The FATF has been outspoken about their concerns over money laundering in crypto, especially because of the anonymous money transfer benefits of blockchain. Anti-Money Laundering and Counter Terrorist Financing rules therefore apply to those regulated under MiCA.
This includes the verification of identities upon account opening, and the requirements to share originator and beneficiary information.
Timelines:
| Type | Definition | Timelines |
| New CASPs | Businesses starting after the MiCA application deadline (12/30/2024) | Must gain authorization before offering their services |
| Established CASPs | Businesses already in existence before the MiCA application deadline (12/30/2024) | A transitional period applies until 1st June 2026 |
It’s important to note that the transitional window is optional - and can vary from member state to member state. Therefore, firms relying on this period should continue to prioritize their application for full authorization - instead of relying on an exemption. Moreover, the prudential nature of this regulation means that firms will be expected to comply with the AML rules, even when they are not yet authorized.
Key challenges for CASPs under MiCA regulations 2025
The cost of compliance remains the single largest barrier to MiCA authorization, but it’s not the only one. Challenges often stem from the complexity of reporting obligations, fragmented oversight systems, and uncertainty around the technical infrastructure required for prudential compliance.
Applying for MiCA authorisation as a CASP is an intensive and resource-heavy process. Smaller and mid-sized firms are particularly exposed to the financial strain of compliance because MiCA’s expectations, especially on governance, reporting, and capital adequacy, don’t scale down with firm size.
Moreover, many firms only realize as they are approaching authorization that their supervisory systems are fragmented, leading to poor oversight and visibility. Integration is key, with firms focusing on data flow faring better in their compliance efforts.
Finally, it can be difficult to understand the tech needs for MiCA regulation CASP compliance, since the regulation includes prudential rules. This ‘regulatory learning curve’ is therefore steep, especially as crypto-native teams try to adapt to documentation and paperwork, under a legal framework that barely exists.
How can CASPs achieve MiCA compliance?
For CASPs, achieving MiCA compliance is possible with:
- An initial whitepaper, released when crypto-assets are offered to the public, or admitted to trading on public trading platforms
- Due diligence processes: suitability assessments, AML measures, and regular reviews
- Market abuse prevention: real-time communication surveillance and analysis, and controls like pre-clearance protocols for employee trading
- Asset protection: clear separation between capital reserves and client-owned assets
- A clear incident reporting procedure: for security breaches, compliance violations, and complaints
How technology can help with MiCA compliance
As CASPs struggle in the scale of surveillance and monitoring requirements under MiCA, technology is the natural remedy. MiCA compliance strategies include recordkeeping tools and surveillance tech.
Recordkeeping tools
| Manual recordkeeping | Advanced tech tools | Potential CASP compliance impact |
| Storage logs | Automated logging of all system events | Fragmented data becomes organized and easily found by internal compliance officers and auditors alike |
| KYC documents | Digital ID verification | Faster onboarding without compromising on security protocols required |
| Physical files for whitepaper disclosure | Governance change logs and archives for audit trails that go back five years | Transparent operations to build relationships with the regulators |
Surveillance
| Manual surveillance | Advanced tech tools | Potential CASP compliance impact |
| Rules-based alert systems | AI-based systems for real-time detection | Speed up the detection of market abuse |
| Analysts that manually track funds across spreadsheets | Blockchain analytics with behavioural evaluation tech | Meet MiCA’s Suspicious Transaction Order Reporting deadlines |
The role of technology in meeting MiCA requirements for crypto firms will also aid with DORA compliance, which will be required from January 2026 onwards. By working with a unified risk dashboard, firms can integrate all of their ICT risks, third party vendor oversight and scenario testing in one place. Having this singular view should aid with operational resilience, should a cyber event occur.
Reviewing MiCA’s role in securing the European crypto ecosystem
Markets in Crypto Assets (MiCA) regulation provides a definitive baseline for the digital finance future. By imposing these rigorous requirements, MiCA is filtering out high-risk threats and demanding institutional-grade operational resilience from those who remain.
CASPs should be in the front lines, taking a proactive regulatory approach to this regulation. Helpful archiving and surveillance tools, such as the Global Relay Archive, are powered by AI to support compliance efforts while enhancing efficiency.
Intelligently unearth the most relevant conversations and operate a forensic drill-down into your data when required. Or, provide an organized way for the auditors to access what they need.
Explore the Global Relay Archive to learn more.
FAQs
What is MiCA?
MiCA is the European Union’s comprehensive unified regulatory framework for the services related to crypto-assets. It establishes a single set of rules for providers across all 27 EU member states, aiming to protect consumers and ensure financial stability.
Is MiCA authorization worth it for crypto firms?
Obtaining MiCA authorization is widely considered a strategic necessity and a significant competitive advantage. As of November 2025, only 15 firms have this coveted status. For CASPs, it serves as a mark of legitimacy and trust for institutional investors and banking partners, crucial for business growth.
What are MiCA provisions for CASPs?
Key provisions include mandatory minimum capital requirements, robust governance arrangements, stringent segregation and safeguarding of client funds, and detailed conflict of interest policies. These are some of the minimum standard best practices for MiCA compliance in crypto exchanges.