Ensuring Your Business is MiCA Compliant: Why It Matters and How Manimama Can Help

In the ever-evolving world of crypto-assets, regulatory compliance has become the key to success and stability. The Markets in Crypto-assets (MiCA) Regulation represents a major regulatory milestone designed to ensure market integrity, financial stability and investor protection. For forward-thinking businesses, MiCA compliance is not only a legal obligation, but also a strategic advantage.

At Manimama Law Firm , we recognize that adapting a business to new MiCA standards can pose major challenges. That is why our experienced team is ready to provide comprehensive support and assistance to companies seeking to comply with MiCA requirements.?

Understanding MiCA Regulation

MiCA Regulation is a comprehensive framework established by the European Union (EU) to regulate the issuance and provision of services related to crypto-assets. MiCA aims to bring clarity and consistency to the crypto-assets market, which has often been marred by regulatory uncertainty. By establishing clear guidelines, MiCA enhances market integrity, protects investors, and promotes innovation. For businesses, compliance with MiCA is essential to avoid legal repercussions, maintain market credibility, and operate efficiently.

MiCA covers three types of crypto-assets, including asset-referenced tokens, e-money tokens, and other types of tokens that are not considered asset-referenced tokens or e-money tokens (for example, utility tokens). It will not regulate financial instruments, deposits, NFTs, electronic money (except those that are e-money tokens), or security tokens.

According to MiCA, companies engaged in issuing crypto-assets and providing services related to them will be required to register and obtain appropriate licenses. This includes:

• Token issuers: companies issuing crypto-assets must provide detailed information about the project, including a whitepaper describing the project and the risks associated with it.
• Crypto-asset service providers (CASPs): companies offering services such as crypto-asset custody, exchanges, wallet providers, and others will need to obtain licenses (authorization).
• Other licensed institutions: such licensed entities as credit institutions, central, securities depositories, electronic money institutions, UCITS, market operators, and investment firms will be able to provide services related to crypto assets with additional simplified authorization.

MiCA's requirements for CASPs should also be noted separately. These are the following:

1. Have a registered office in the EU country, where it provides at least part of the crypto-asset services.?
2. Have a place of effective management in the EU.?
3. At least one of the directors must be a resident of the EU.
4. The CASP must at all times meet the conditions for its authorisation.
5. It is allowed to provide crypto-asset services throughout the EU, either through the right of establishment, including through a branch, or through the freedom to provide services; CASPs that provide crypto-asset services on a cross-border basis will not be required to have a physical presence in the territory of a host EU country.
6. Have sufficient capital, depending on the type of crypto-asset services provided:

a) €50,000 - execution of orders on behalf of clients; placing of crypto-assets; providing transfer services for crypto-assets on behalf of clients; reception and transmission of orders for crypto-assets on behalf of clients; providing advice on crypto-assets; and/or providing portfolio management on crypto-assets;

b) €125,000 - services listed in the section (a) and? providing custody and administration of crypto-assets on behalf of clients;? exchange of crypto-assets for funds; and/or exchange of crypto-assets for other crypto-assets;

c) €150,000 - services listed in the section (b) and the operation of a trading platform for crypto-assets.

As for CASP licensing, MiCA outlined such steps for the process:

1. Select the legal structure and location of your CASP in an EU member state.
2. Prepare an application for authorization by the relevant national competent authority where your head office will be located. Include comprehensive details on identification, ownership, internal controls, policies, procedures, systems, security measures, complaint handling, etc. as specified in Article 62 of MiCA.
3. Submit the application and the required information. The competent authority will assess the completeness of the information within 25 working days and request any lacking information.
4. After your application is deemed complete, the competent authority will make a decision on granting the permit within 40 business days, either approve it or refuse it stating the reasons.
5. If you have received authorization, you must comply with the conditions and scope of your authorization at all times. This includes compliance with current capital, governance, operational resilience, complaints, and other regulatory requirements.
6. Document orderly liquidation plans appropriate to your business in the event of a wind-down. Implement policies, procedures, and mechanisms related to custody, trading, exchange, placement, and other services, as appropriate.
7. To expand your services, apply to the competent authority to renew your authorization. To provide cross-border services in other EU member states, submit a notification of your plans, which will be transmitted to the authorities of the receiving country.
8. Designate a responsible person to monitor compliance, submit annual reports to the authorities, and act as a point of contact for the competent authorities and the European Securities and Markets Authority.?

In addition, it must be said that national competent authorities and the ESMA will oversee and enforce compliance with the MiCA Regulation. They will have powers to conduct inspections, request information, and impose fines for non-compliance.

In summary, MiCA is an important step towards creating a stable and transparent legal environment for crypto-assets in the EU. Its implementation is expected to increase trust in cryptocurrencies and promote their wider acceptance in the economy.

Why is MiCA Compliance Crucial for Your Business?

• Legal obligations

Compliance with MiCA is not optional. Failure to adhere to the regulations can result in severe penalties, including hefty fines, legal actions, and significant reputational damage. Ensuring your business is MiCA compliant is a proactive step to safeguard against these risks.

• Market credibility and trust

In an industry where trust is paramount, being MiCA compliant signals to investors, customers, and partners that your business operates with the highest standards of transparency and reliability. It enhances your market credibility and builds long-term trust.

• Operational efficiency

Meeting MiCA regulatory standards can streamline your business operations, reducing the risks associated with non-compliance. It ensures that your processes are robust, transparent, and aligned with industry best practices.

Target Audience for MiCA Compliance

Our MiCA Compliance product is ideal for:

• Crypto-asset service providers: exchanges, wallet providers, custodians, etc.
• Financial institutions: banks, investment firms, and other financial entities dealing with crypto-assets.
• Tech startups and innovators: blockchain and fintech companies exploring crypto-asset solutions.
• Legal and compliance teams: in-house legal and compliance departments seeking expert support.

Comprehensive Jurisdictional MiCA Insights

At Manimama, we recognize that MiCA compliance is not a one-size-fits-all solution. Different jurisdictions have unique regulatory landscapes and understanding these nuances is crucial for seamless compliance.?

Currently, we offer in-depth insights into MiCA regulations in numerous EU jurisdictions for future CASPs, ensuring that our clients have the precise information they need to operate compliantly wherever they are. Let's walk through one of the popular countries - Lithuania.

National legislation under the MiCA states that the legal entity incorporated in Lithuania intending to carry out / carrying out the activities of a virtual currency exchange operator and/or a depositary virtual currency wallet operator must comply with such requirements:

1. a public limited liability company or a private limited liability company:
2. the company formed in Lithuania in another legal form or a branch of a legal person of a the EU country or a foreign state is required, for the entire period of its operation, to hold a surety bond issued by an insurance undertaking / a surety or guarantee document issued by a financial institution in respect of an amount of at least €100,000 per customer claim for indemnity, and an amount of at least €500,000 per annum in respect of all claims for indemnity by customers.

Keep in mind: from December 30, 2024, if you wish to be the CASP under MiCA, changes will be required, including meeting the requirements set out in Title 5 of MiCA and ESMA's consultation documents.

You can read more about the features of EU jurisdictions in accordance with MiCA here*:

• Austria
• Croatia
• Estonia
• Finland
• Germany
• Hungary
• Ireland
• Latvia
• Lithuania
• Netherlands

* Our dedicated team of lawyers is continuously working to expand this list of “MiCA updates”, aiming to cover all EU countries. The list of countries will be updated every week. So check the "Knowledge" section of our website or our Manimama Law Firm page in Linkedin to stay informed.?

Thus, we are committed to making sure that as many people as possible are aware of the specifics of MiCA compliance in different EU countries.

What Can Manimama Offer You Regarding MiCA Compliance?

In the booming crypto-asset market, compliance with MiCA is key to sustainable business success and growth. Our team has developed a comprehensive list of MiCA-related services that cover all aspects of your business and help you stay on top of it.

Our services regarding MiCA compliance are as follows:

• Assessment of MiCA compliance readiness
• Formation of an EU legal entity
• Full CASP authorization
• Preparation of policies and procedures - it can be drafting new policies and procedures to meet MiCA requirements or revising the existing policies to incorporate MiCA requirements (i.e. AML framework with customer due diligence, transaction monitoring and reporting procedures; risk management and control frameworks; etc.)
• Liaising with regulators on your behalf
• Calculation of capital and financial projections
• Preparing a program of activities
• Governance assessment
• Shareholder assessment
• White paper compilation/modification
• Assessment of AML compliance and sanctions
• Crypto-asset strategy
• Crypto-asset classification
• Assessing compliance of marketing materials
• Providing a legal opinion (for instance, crypto exemption)
• Ongoing support, which includes:

We offer tailor-made solutions focused on your specific needs and support you every step of the way on your journey to full MiCA compliance.?

Explore our services and more information about the MiCA compliance, and learn how Manimama Law Firm can help you not not only to meet MiCA requirements, but also succeed in the crypto-asset market.?

Why Choose Manimama?

We are ready to answer you why Manimama Law Firm is considered the leading law firm in the crypto sphere:

• Expertise and experience

Our team comprises seasoned legal and financial experts with a deep understanding of the crypto-assets market. With a proven track record of successful legal assistance, we bring unmatched expertise to your business.

• Customization and flexibility

We understand that every business is unique. Through our MiCA Compliance product, we offer customized solutions to meet your specific needs. We also provide flexible packages and pricing options to suit your budget.

• Holistic approach

Our service covers all aspects of MiCA compliance, integrating seamlessly with other regulatory requirements and business processes. We offer a comprehensive solution that addresses your compliance needs holistically.

• Client-centric support

Our dedicated support team is always available for personalized assistance. We believe in proactive communication, keeping you informed and confident in your compliance journey.

Closing Thoughts

Ensuring MiCA compliance is essential for any business operating in the crypto-assets space. It not only fulfills legal obligations but also enhances market credibility, operational efficiency, and investor trust. We offer comprehensive, customizable and expert solutions to help you navigate the complexities of the MiCA with ease.

Contact us today at [email protected] or use our telegram @manimama_sales to learn more about your compliance to MiCA and how we can help you achieve it seamlessly.?

Let your business step confidently into the future with Manimama Law Firm , where we not only understand the complexity of new MiCA regulations, but also know how to make them into your competitive edge.