"Most founders approaching their first CASP application understand, at least abstractly, that MiCA requires a real EU presence. What they underestimate is how the regulator defines real. The typical early-stage setup looks coherent on paper: a registered office in a favorable EU jurisdiction, a director named in the governance documents, ICT systems either cloud-hosted or managed from the group's global infrastructure, and paid-in capital sitting in a newly opened bank account. From the inside, this feels like an EU company. From a National Competent Authority's perspective, it may look like a letterbox with a director attached."
"The concern driving all of it is the same: preventing letterbox companies, entities that exist on paper in a favorable jurisdiction but lack any meaningful economic activity, human capital, or operational capacity within it. The regulatory logic here is older than MiCA. In the landmark Cadbury Schweppes ruling (Case C-196/04), the Court of Justice of the European Union established that the freedom of establishment cannot be used to create wholly artificial arrangements that lack genuine economic activity. MiCA codifies that principle directly into crypto-asset regulation."
"Article 59(2) of MiCA states that authorized CASPs must have their registered office in a Member State where they carry out at least part of their crypto-asset services, must have their place of effective management within the Union, and must have at least one director resident in th"
MiCA substance requirements for authorized crypto-asset service providers require more than a registered office in an EU jurisdiction. Authorized CASPs must carry out at least part of their crypto-asset services in the Member State of their registered office, maintain their place of effective management within the Union, and have at least one director resident in the Union. Regulators apply functional tests across personnel, technology, and financial resilience to verify meaningful economic activity and operational capacity. The goal is to prevent letterbox companies that exist on paper without human capital or real operations in the jurisdiction. The approach aligns with earlier EU principles on preventing wholly artificial arrangements lacking genuine economic activity.
#mica #casp-authorization #eu-regulatory-compliance #substance-requirements #crypto-asset-regulation
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