The 2025 CASP regulatory framework is undergoing a significant transformation for Crypto-Asset Service Providers (CASPs), with the European Union’s Markets in Crypto-Assets Regulation (MiCA) setting a new standard for compliance. Effective from January 1, 2025, MiCA introduces a unified legal framework for CASPs across the EU, requiring a CASP license under MiCA to ensure transparency, security, and cross-border operational efficiency.
To legally operate within the EU, all CASPs must obtain a MiCA license or a CASP license, which is now a regulatory prerequisite. MiCA covers a broad spectrum of crypto asset services, including crypto-to-fiat exchanges, trading platform management, custody solutions, and portfolio management. Existing Virtual Asset Service Providers (VASPs) can continue under national licenses until December 31, 2025, or July 1, 2026, in specific cases, offering a transitional period to meet MiCA compliance requirements.
In Cyprus, the Cyprus Securities and Exchange Commission (CySEC) drives the implementation of MiCA requirements, setting clear standards for Crypto-Asset Service Providers (CASPs). As the country’s primary AML/CFT authority, CySEC manages the entire lifecycle of crypto-asset activities—from registration and licensing to ongoing supervision. By aligning the Prevention and Suppression of Money Laundering Law 2007 with AMLD V, CySEC has reinforced a robust regulatory framework that not only meets national and EU standards but also offers a straightforward path for businesses to secure a CASP license.
In this article we explore:
- Understanding CASP License Types: Choose the Right Option for Your Crypto Business
- CySEC CASP License Classes: Services and Capital Requirements
- CASP License Classes: Services and Capital Requirements
- Compliance Requirements for Obtaining a CASP License
- Understanding the Fees Associated with CASP Licensing
- Achieve CASP License Compliance with CX Financia’s Expert Support
Understanding CASP License Types: Choose the Right Option for Your Crypto Business
Choosing the right CASP license is a critical step for crypto-asset service providers aiming to operate legally and efficiently within the EU market. The Cyprus Securities and Exchange Commission (CySEC) offers three classes of CASP licenses, each designed to match the scope of services offered by crypto businesses. Selecting the appropriate CASP class ensures compliance with MiCA regulations while aligning with your business model and strategic goals.
To provide a clear and practical overview, we’ll first outline the services included in each CASP license class, followed by a summary table to help you make an informed decision.
CySEC CASP License Classes: Services and Capital Requirements
CySEC classifies CASP licenses into three categories, each with specific services offered and minimum capital requirements:
1. Class 1 CASP License
- Services Offered:
- Investment advice
- Execution of orders for crypto-assets on behalf of clients
- Placing, reception, and transmission of orders
- Portfolio management
- Transfer services for crypto-assets
- Minimum Capital Requirement: €50,000
2. Class 2 CASP License
- Includes all Class 1 services, plus:
- Crypto-to-fiat and crypto-to-crypto exchange services
- Operating a trading platform for crypto-assets
- Minimum Capital Requirement: €125,000
3. Class 3 CASP License
- Covers all Class 1 and Class 2 services, plus:
- Custody and administration of crypto-assets on behalf of clients
- Underwriting services
- Advanced trading platform operations
- Minimum Capital Requirement: €150,000
CASP License Classes: Services and Capital Requirements
Now that you understand the types of CASP licenses available, let’s explore the exact steps needed to secure your license and ensure full compliance with MiCA regulations.
1. Initial Preparation: Setting Up Your Business in Cyprus
- Register as a Limited Liability Company (LTD) in Cyprus.
- Establish a physical office in Cyprus to meet economic substance requirements.
- Deposit the required minimum capital into a Cyprus-based bank account.
2.Key Documents for Your CASP License Application
To successfully obtain your CASP license under MiCA regulations, submit the following documents to CySEC:
- Company Information: Legal name, registered address, Legal Entity Identifier (LEI), and website details.
- Services & Operations: Comprehensive list of crypto services offered and a detailed marketing strategy.
- Governance & Compliance:
- Articles of Association and business plan outlining financial projections, governance structure, and compliance measures.
- AML/CFT policies, including Know Your Client (KYC) procedures and internal control frameworks.
- Proof of good repute for management and shareholders.
- Financial Documentation:
- Proof of prudential safeguards (Article 67 compliance) and initial capital deposit.
3. CySEC Review Process: How to Get Your CASP License Approved
The Cyprus Securities and Exchange Commission (CySEC) follows a structured three-stage review process to approve CASP license applications, ensuring compliance with MiCA regulations:
- Receipt of Application: CySEC acknowledges the submission within five working days, confirming the application is in process.
- Preliminary Document Check: Within 25 working days, CySEC conducts an initial review to verify that all required documents are complete and meet the CASP licensing requirements.
- Detailed Compliance Review: CySEC performs a thorough assessment of your application’s compliance with MiCA standards, with a final decision typically issued within 40 business days.
Compliance Requirements for Obtaining a CASP License
To meet MiCA compliance requirements and secure your CASP license, your business must ensure they adhere to the following regulatory standards set by CySEC:
- A minimum of four board members: two executive directors and two independent members.
- Appointment of a Compliance Officer, Risk Manager, and Financial Officer.
- Policies for client identity verification, suspicious transaction monitoring, and reporting.
- Systems for risk management, internal audits, and asset segregation.
Understanding the Fees Associated with CASP Licensing
After covering the compliance requirements for obtaining a CASP license, it’s crucial to have a clear understanding of the fees involved in the licensing process. At CX Financia, we emphasize the importance of financial planning when applying for a Crypto-Asset Service Provider (CASP) license under MiCA regulations.
For a detailed breakdown of the specific costs and fees related to CASP licensing, including application fees, ongoing regulatory costs, and capital requirements, refer to our previous article, “MiCAR Compliance for CASPs“ where we explain CySEC Policy Statement PS-03-2024 on Fees and Information Submission
In this section, we’ll highlight the key financial considerations you need to budget for, ensuring that your business is fully prepared for both initial licensing expenses and long-term compliance costs.
Turnover-Based Variable Fee Scale
- 1% for turnover between €500,001 and €1,000,000
- 0.4% for turnover between €1,000,001 and €5,000,000
- 0.3% for turnover between €5,000,001 and €10,000,000
- 0.1% for turnover exceeding €10,000,001
- Maximum Cap: €500,000 annually
How CX Financia Can Help You Secure Your CASP License
At CX Financia, we’re here to guide you through every step of securing your Crypto-Asset Service Provider (CASP) license. With our deep expertise in MiCA regulations, we offer personalized support to make the licensing process as smooth and straightforward as possible. Our services are designed to fit your business needs, including:
- Regulatory Consultation: Expert guidance on CASP licensing requirements, including strategic planning and compliance with CySEC regulations.
- Documentation Assistance: Professional support in preparing and submitting all required documents, including business plans, AML/CFT policies, and governance frameworks.
- Implementation of AML/KYC Frameworks: Developing robust anti-money laundering (AML) and Know Your Customer (KYC) systems to meet MiCA compliance standards.
- Ongoing Compliance Support: Continuous monitoring and advisory services to maintain compliance and adapt to evolving regulatory requirements.
Learn more about our Regulatory Compliance Services and Crypto-Asset Licensing Solutions to see how we can support your business at every step.
Achieve CASP License Compliance with CX Financia’s Expert Support
Obtaining a CASP license is a strategic decision for crypto businesses that want to build trust, strengthen credibility, and expand their reach in the EU market. By understanding the CASP licensing process, staying on top of compliance requirements, and working with the regulatory experts at CX Financia, you can approach this process with clarity, confidence, and peace of mind.
Take the Next Step Toward Your CASP License
Whether you’re starting the application process, need help with AML/KYC compliance, or require ongoing regulatory support, CX Financia is here to help. Our team provides tailored guidance, helping you achieve full compliance with MiCA regulations and secure your CASP license without unnecessary delays.
Ready to Take the Next Step?
We welcome your queries and look forward to being of value on your CASP licensing journey. Let’s simplify the process together—with expert guidance every step of the way.
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