CMS Expert Guide to Crypto Regulation in MiCAR

Disclaimer: The following responses provide a general overview of the EU-wide regulatory framework under the Markets in Crypto-Assets Regulation (MiCAR). MiCAR establishes common rules applicable across all EU Member States regarding the issuance and provision of services relating to crypto-assets. 

While these responses reflect the harmonised aspects of the regulation, certain details – such as implementation practices, timelines, licensing costs, and additional national requirements – may vary by jurisdiction. For jurisdiction-specific information, including steps taken by national regulators and any local variations, please refer to the replies provided under each individual country section.

Crypto-assets in the EU are regulated under Regulation (EU) 2023/1114 on Markets in Crypto-Assets (MiCAR), which establishes a harmonised framework for the issuance, offering, and trading of crypto-assets across EU Member States. MiCAR applies to crypto-assets that are not covered by existing EU financial services legislation, such as MiFID II and the Prospectus Regulation, and introduces specific regimes for:

• Asset-referenced tokens (ARTs);
• E-money tokens (EMTs); and
• Other crypto-assets, including utility tokens. 

MiCAR also sets out conduct of business rules, governance standards, asset segregation requirements and prudential requirements for crypto-asset service providers (CASPs), which include services such as custody, trading, exchange, advising, transfer and operation of trading platforms. As of 30 December 2024, CASPs must have a license issued by the national competent authority to offer their services in the EU. Regulated financial entities such as credit institutions, investment firms, market operators, and electronic money institutions can offer crypto-asset services upon notification. 

MiCAR entered into force on 29 June 2023, with the main provisions applying from 30 December 2024, while rules relating to ARTs and EMTs apply from 30 June 2024.

MiCAR has direct effect in all member states. 

Please also see our CMS Legal experts on Markets in Crypto-Assets (MiCA) regulation (cms.law).

Please refer to individual chapters in this guide for details on how these activities are regulated in separate EU jurisdictions. 

Under MiCAR, the following activities are regulated throughout the EU:

• Direct sales of tokens by issuers:
  • Regulated if the tokens fall within MiCAR’s scope (i.e., ARTs, EMTs, or other crypto-assets).
  • Issuers must publish a white paper and may need authorisation, depending on the type of token, unless an exemption applies.
• Exchange (buy/sell):
  • Regulated as a crypto-asset service under MiCAR.
  • CASPs offering exchange, broker and trading services in relation to crypto-assets must obtain a license to provide their services in the EU.
• Custody (hold):
  • Regulated as a crypto-asset service under MiCAR.
  • CASPs that provide safekeeping or control of crypto-assets on behalf of clients—such as custodial wallet services or the custody of private cryptographic keys granting access to such assets— obtain a license to provide their services in the EU.
• Borrowing/lending:
  • MiCAR does not explicitly regulate borrowing and lending as a crypto-asset service under MiCAR.
  • MiCAR excludes lending and borrowing of crypto-assets, including e-money tokens, from its scope and does not affect applicable national laws governing such activities. As such, if these activities fall under other EU financial regulations (e.g., MiFID/CRD/CRR), they may be subject to additional rules at national level.
• Yield/staking services:
  • Yielding/staking, which involves the process of immobilising crypto-assets to support the operations of proof-of-stake and proof-of-stake-like blockchain consensus mechanisms in exchange for the granting of validator privileges that can generate block rewards, is not explicitly regulated as a crypto-asset service under MiCAR.
  • However, a provider that offers staking services on behalf of clients—by directly interacting on a proprietary basis with a distributed ledger protocol to stake assets for validator privileges and block rewards, or by committing assets to a liquidity pool in exchange for yield—typically holds clients’ crypto-assets in custody. As a result, such providers must be authorised under MiCAR to provide custody and administration services of crypto-assets on behalf of clients. 
• Staking on proof of stake consensus mechanisms:
  • Although staking under proof-of-stake consensus mechanisms is not explicitly classified as a regulated service under MiCAR, providers offering staking services on behalf of clients must obtain a license to provide custody and administration services if they hold clients’ crypto-assets in custody.
• NFTs:
  • MiCAR generally excludes non-fungible tokens (NFTs) unless they are part of a larger fungible series or collection, in which case they might be treated as regulated crypto-assets.

Active solicitation by offshore firms into the EU is not permitted under MiCAR unless the firm is authorised as a CASP within the EU. 

MiCAR permits reliance on reverse solicitation only under strict conditions. Offshore firms may in certain cases provide crypto-asset services to an EU client without a MiCAR licence, but only if the client has initiated the request entirely on their own initiative.

Reverse solicitation under MiCAR is only permitted under strict and narrowly interpreted conditions. ESMA emphasises that this exemption is exceptional and applies only when: (i) the EU client initiates the service request on their own exclusive initiative, without prior solicitation or marketing by the offshore firm; (ii) the exemption is limited to the specific crypto-asset service requested; and (iii) it cannot be used to expand into other services.

Please refer to individual chapters in this guide.

MiCAR sets out a harmonised process across the EU. Competent authorities are required to assess licence applications within 40 working days of receiving a complete application. During the assessment period and no later than on the 20^th working day of that period, competent authorities may request for further information. This will suspend the 40 working days-period, but the suspension cannot exceed 20 working days.

The exact time to prepare an application and address any follow-up queries may vary by jurisdiction. In practice, obtaining a MiCAR licence will take several months.

Please refer to individual chapters in this guide.

MiCAR does not fix costs at EU level. Costs vary based on:

• National application or supervisory fees set by each Member State.
• Legal, compliance, and consulting fees for preparing the application.

Prudential safeguards put in place by the CASP, which must equal the higher of: (i) the minimum capital requirement applicable under MiCAR (EUR 50,000 to EUR 150,000, depending on the services provided), or (ii) one quarter of the CASP’s fixed overheads for the preceding year.

Please refer to individual chapters in this guide.

Please refer to individual chapters in this guide.