ESMA Issues Supervisory Briefing on CASPs Authorisation Under MiCA

Key changes include:

The publication aims to provide National Competent Authorities (NCAs) with guidance on the practical application of MiCA across the EU.

Key takeaways from the report include:

➡️ Risk-Based Approach: ESMA does not consider any CASPs as low risk with the guidance outlining the factors that increase firm risk such as size, outsourcing, and business model;

➡️ Substance and Governance: NCAs must ensure firms have sufficient in-country personnel, executive presence, and that key functions are not primarily performed outside the EU;

➡️ Outsourcing: CASPs must be able to demonstrate effective control over outsourced activities and must not outsource to the extent that they become ‘letter-box entities’; and

➡️ Business Plans: Must be realistic with intermediate milestones and consider scenarios where revenues fall significantly below projections.

✅ CASPs operating in the EU should ensure review their governance frameworks and business plans to ensure they align with the regulator’s expectations.

💡 Plenitude’s Digital Assets Practice supports firms navigating the registration and authorisation process in an evolving regulatory landscape. Visit our website for more information: https://www.plenitudeconsulting.com/services/digital-assets-practice