Are You Ready? Navigating MiCA Compliance as a CASP

The Markets in Crypto-Assets (MiCA) regulation is set to redefine the operational landscape for Crypto-Asset Service Providers (CASPs) in the EU. Are you prepared to meet the stringent compliance requirements? The complexity of the regulation can be overwhelming, but a systematic approach is essential. Especially for CASPs operating in jurisdictions like Malta, a hub for blockchain innovation, understanding and implementing a comprehensive compliance checklist is crucial. At Contact Advisory Services Ltd., we’re here to simplify this process, providing a clear roadmap to MiCA compliance.

Step 1: Understanding MiCA’s Scope: Defining Your Role as a CASP

The first step towards compliance is understanding whether your business falls under MiCA’s definition of a CASP.

Defining CASP: MiCA defines a CASP as any entity providing services related to crypto-assets, including custody, trading, and advisory services.
Identifying Relevant Regulations: Determine which specific provisions of MiCA apply to your operations.
Malta Specifics: Understand how the Malta Financial Services Authority (MFSA) interprets and applies these definitions within the Maltese regulatory framework.

Step 2: Conducting a Gap Analysis: Assessing Your Current Compliance Levels

A thorough gap analysis helps identify areas where your current practices fall short of MiCA’s requirements.

Evaluating Existing Policies: Review your current AML/KYC, operational, and security policies.
Identifying Deficiencies: Pinpoint areas where your policies don’t align with MiCA’s standards.
Documenting Findings: Create a detailed report of your findings to guide your compliance efforts.

Supervisory Briefing on the Authorisation of CASPs under MiCA

Step 3: Implementing Robust AML/KYC Procedures: Ensuring Regulatory Alignment

MiCA reinforces the importance of strong AML/KYC procedures.

Customer Due Diligence (CDD): Implement enhanced CDD measures to verify customer identities.
Transaction Monitoring: Establish systems to monitor transactions for suspicious activity.
Reporting Obligations: Understand and fulfill your obligations to report suspicious transactions to relevant authorities.
Malta Specifics: Adhere to the MFSA’s specific AML/KYC guidelines, which may include additional requirements beyond the general EU regulations.

Step 4: Establishing Robust Operational and Governance Frameworks: Building Trust and Security

MiCA mandates strong operational and governance frameworks to ensure security and stability.

Risk Management: Implement comprehensive risk management strategies to mitigate operational and security risks.
Internal Controls: Establish robust internal controls to prevent fraud and ensure compliance.
Cybersecurity Measures: Implement strong cybersecurity measures to protect client assets and data.
Data Protection: Implement robust data protection policies that adhere to GDPR, and any data protection rules set forth by the MFSA.

Step 5: Preparing for Licensing and Authorization: Navigating the Regulatory Hurdles

Obtaining authorization is a crucial step for CASPs operating in the EU.

Gathering Documentation: Compile all necessary documentation, including business plans, financial statements, and compliance policies.
Submitting Applications: Submit your application to the relevant national competent authority (NCA).
Ongoing Communication: Maintain open communication with the NCA throughout the application process.
Malta Specifics: Engage with the MFSA early in the licensing process, as they may require additional documentation and have specific procedural requirements.

Step 6: Ongoing Compliance and Reporting: Staying Ahead of Regulatory Changes

Compliance is an ongoing process, not a one-time event.

Regular Audits: Conduct regular audits to ensure ongoing compliance.
Reporting Obligations: Fulfill your reporting obligations to the NCA.
Staying Updated: Stay informed about regulatory changes and updates.
Malta Specifics: Keep up to date with any updates that the MFSA releases.

Malta’s Strategic Advantage: A Hub for MiCA Compliant CASPs

Malta’s established regulatory framework and proactive approach to blockchain technology make it an ideal location for CASPs seeking to comply with MiCA.

MFSA’s Expertise: The MFSA’s experience in regulating virtual financial assets provides a strong foundation for implementing MiCA.
Business-Friendly Environment: Malta’s business-friendly environment and strategic location make it an attractive destination for CASPs.
Contact Advisory Services Ltd. Local Expertise: Our localized knowledge can help your business navigate the specific requirements in Malta.

Your MiCA Compliance Journey Starts Now

MiCA compliance is essential for CASPs operating in the EU. By following this step-by-step checklist, you can navigate the regulatory landscape with confidence. At Contact Advisory Services Ltd., we’re committed to supporting you on this journey. Proactive compliance will not only help your business thrive, but also build trust in the crypto industry.

Contact us now for a free consultation!