LINARI LAW

ESMA supervisory briefing for CASPs under MiCA: The crypto standard

On January 31, 2025, ESMA issued new guidance for crypto-asset service providers (CASPs) under the EU’s MiCA regulation. CASPs must meet strict standards in governance, compliance, and anti-money laundering efforts. A genuine local presence and strong oversight are key for authorisation. Cross-border operations face heightened scrutiny.

How will these changes affect the crypto industry?

The European Securities and Markets Authority (ESMA) issued new supervisory guidance on January 31, 2025, regarding the authorisation of crypto-asset service providers (CASPs) under Regulation (EU) 2023/1114 of the European Parliament and of the Council of 31 May 2023 on markets in crypto-assets, as amended (MiCA). These guidelines aim to establish a harmonised regulatory framework across the EU, setting stringent requirements for CASPs seeking regulatory authorisation. The guidance underscores the importance for firms operating in the crypto-asset space across the EU to meet heightened expectations in governance, compliance, and risk management.

ESMA considers all CASPs to be high-risk entities due to their cross-border operations and exposure to financial crime risks, particularly money laundering and terrorist financing. As a result, national supervisory authorities will subject applications to rigorous assessments, ensuring that firms demonstrate robust operational substance, effective internal controls, and compliance. A key requirement is maintaining a sufficient physical presence within the country of authorisation. CASPs must establish genuine decision-making authority at the local level, with executives and key personnel actively engaged in oversight and governance. “Letter-box” entities will not satisfy MiCA’s authorisation standards.

While outsourcing remains a common practice, special scrutiny will apply to outsourcing arrangements involving non-EU entities. Additionally, all CASPs will be subject to rigorous fit and proper assessments of their senior executives and board members. Prior regulatory violations, governance failings, or ongoing criminal proceedings—even in non-EU jurisdictions—may significantly impact an entity’s ability to secure CASP authorisation.

Given the inherent risks within the crypto-asset industry, MiCA places a strong emphasis on anti-money laundering (AML) and counter-terrorist financing (CFT) measures. Firms must implement comprehensive AML/CFT frameworks that align with EU regulatory expectations, ensuring they can effectively monitor, detect, and mitigate financial crime risks. The ability to demonstrate compliance with these standards will be critical for firms seeking to establish or maintain operations in the pan-European crypto-asset market.

PREVIOUS NEXT

Related posts

Browse All

Luxembourg boosts competitiveness in active ETFs to rival Ireland

Luxembourg is advancing in the active ETF market, challenging Ireland’s dominance. With regulatory innovations and tax incentives, it’s attracting fund managers and investors alike. The CSSF now allows semi-transparent active UCITS ETFs, enhancing flexibility. The recent abolition of the subscription tax further strengthens its appeal. Could Luxembourg become Europe’s leading…

CSSF to replace visa-approval procedure for fund prospectuses

Exciting changes are coming to Luxembourg’s fund industry! Starting April 2025, the CSSF will replace its traditional visa-approval process with a cutting-edge e-Identification system for regulated fund prospectuses. This shift promises enhanced efficiency, greater flexibility, and a fully digitalized submission process. But what does it mean for fund managers and…

EU competitiveness: Fund and asset management industry urges bold action

Europeans are saving, but their money isn’t fueling the economy as it should. While households accumulate wealth, businesses still struggle to access the capital they need to grow. The European Commission’s upcoming Savings and Investments Union (SIU) strategy aims to fix this disconnect—but will it go far enough?

Housing tax measures extended until June 2025

Luxembourg’s housing market is at a turning point, and the government is stepping in to keep the momentum going. With key tax incentives set to expire, policymakers have decided to extend them until mid-2025—offering buyers and investors another chance to benefit. Will these measures be enough to revive off-plan property…

MiFID/MiFIR review: Draft law introduced in Luxembourg

Luxembourg is introducing a draft law to align with new EU directives, boosting financial market transparency and fairness. Key changes include easier access to capital for SMEs and a centralized platform for financial data. These reforms strengthen Luxembourg’s position as a top European financial hub. How will this reshape the…

Important updates to Luxembourg’s RCS and RBO

Luxembourg’s new amendments to the RCS and RBO laws, effective February 1, 2025, promise major changes in data accuracy and compliance. Automatic updates, tighter monitoring, and new registration requirements for RAIFs and natural persons are among the key updates. How will these reforms impact businesses?
Browse All

A LEGACY OF LAW. A FUTURE OF INNOVATION.
25 years of legal excellence – the journey continues.

Contact Info

+352 27 11 60 10

UP