Choosing a MiCAR HQ: Comparing CASP Jurisdictions in the EU

While the second part of Europe's Markets in Crypto-Assets Regulation ("MiCAR") entered into application on 30 December 2024, many crypto-asset service providers (CASPs) looking to carry out activity within the European Economic Area are still grappling with the challenge of which national competent authority to seek authorisation from. Firms in this position are attempting to carefully balance a myriad of factors to ascertain the optimal landing spot. That is, management teams are weighing qualitative factors such as regulatory clarity, crypto-asset friendliness, costs related to applications and ongoing maintenance, reputation of the national competent authority, and caliber of local workforce in order to identify the perfect jurisdiction to serve as their gateway to the European marketplace.

According to the European Securities and Markets Authority's register of crypto-asset service providers, there are 16 unique authorised firms as of 31 March 2025. These firms are authorised by one of only six national competent authorities: Germany's Federal Financial Supervisory Authority ("BaFin"), the Malta Financial Services Authority ("MFSA"), the Netherlands Authority for the Financial Markets ("AFM"), Cyprus' Securities and Exchange Commission ("CySEC"), Luxembourg's Commission de Surveillance du Secteur Financier ("CSSF"), and Spain's Comisión Nacional del Mercado de Valores ("CNMV"). This proven track record of early approvals, of course, heightens the appeal of these six leading authorities. However, there are several other member states that are also garnering a lot of attention despite the current lack of authorisations.

The following details the high-level advantages and challenges associated with several of the more popular jurisdictions for crypto-asset service providers to seek authorisation:

Germany

BaFin · Federal Financial Supervisory Authority

✓ 4 authorised firms

Advantages

Germany is known for its strong regulatory framework and reputation in the financial services sector. BaFin has been a key player in regulating crypto-asset service providers since 2019, when it introduced the German Banking Act amendment to include crypto activities. BaFin's authorisation is seen as a significant endorsement of a company's reliability and commitment to meeting high standards. As a result, having a BaFin license can help build trust with investors, partners, and clients.

Challenges

The BaFin authorisation process can be complex and time-consuming, requiring detailed documentation, risk assessments, compliance procedures, and financial projections. BaFin will thoroughly review all aspects of your operations, from anti-money laundering (AML) processes to your operational structure. Germany is known for its strict regulatory oversight of financial markets. While this is a strength in terms of stability, it also means that businesses will face intense scrutiny once authorised.

Malta

MFSA · Malta Financial Services Authority

✓ 5 authorised firms

Advantages

Malta is often referred to as "Blockchain Island" because it has been one of the first European countries to embrace and regulate the crypto sector. Malta introduced its Virtual Financial Assets Act (VFAA) in 2018, which laid the foundation for the regulatory framework for crypto-asset service providers, and it aligns well with MiCAR. The MFSA provides a clear and structured regulatory framework, offering guidance on how businesses can comply with crypto regulations, ensuring predictability for businesses seeking authorisation.

Challenges

While Malta has built a strong reputation in the crypto space, it has also faced challenges in regulatory enforcement and oversight in some sectors, particularly after incidents involving non-compliance in the broader financial sector. This has led to occasional concerns about the robustness of enforcement. Compliance with Malta's regulatory requirements can be costly. Crypto firms are required to implement robust anti-money laundering and know-your-customer systems, which involve significant operational expenses.

Netherlands

AFM · Authority for the Financial Markets

✓ 4 authorised firms

Advantages

The Dutch government has demonstrated a positive attitude toward blockchain technology and digital assets. It aims to foster innovation while ensuring consumer protection, financial stability, and AML/CTF compliance. This balanced approach makes the Netherlands one of the more favorable countries for crypto businesses in Europe. The AFM has been proactive in integrating crypto regulation with traditional financial services laws, providing a predictable and transparent regulatory environment.

Challenges

The application process for CASP authorisation in the Netherlands is comprehensive and can be time consuming. Businesses must submit a detailed business plan, AML/KYC compliance procedures, financial resources, and other regulatory documentation. The AFM will carefully evaluate the firm's business model, governance structures, risk management systems, and financial stability. This process can take several months, and applicants need to ensure that they meet all the regulatory requirements to avoid delays.

France

AMF · Autorité des Marchés Financiers

⚬ EMT issuers only (3)

Advantages

France has established one of the most detailed and transparent regulatory frameworks for crypto-assets in Europe. The Autorité des Marchés Financiers ("AMF"), the French financial markets regulator oversees the crypto-asset space. The French framework is originally based on the Pacte Law, which regulates crypto-asset service providers, including requirements for AML/KYC compliance, security protocols, and licensing. This clarity ensures that businesses know exactly what is expected to obtain and maintain authorisation.

Challenges

The application process for CASP authorisation in France is rigorous and requires significant preparation. The AMF will assess the company's governance structure, compliance programs, financial resources, and technical capabilities, which can take several months to complete. The review process can be lengthy and detailed, requiring businesses to have a thorough understanding of the legal and regulatory expectations.

Luxembourg

CSSF · Commission de Surveillance du Secteur Financier

✓ 1 authorised firm

Advantages

Luxembourg is known for its stability in financial regulation and has actively embraced blockchain and cryptocurrency as part of its broader financial services sector. The Commission de Surveillance du Secteur Financier ("CSSF"), Luxembourg's financial regulator, is responsible for overseeing crypto-asset service providers, ensuring that businesses operate under a clear and well-defined regulatory framework. A license from CSSF adds a layer of trust and credibility that is valuable for businesses seeking to attract high-net-worth clients or institutional investors.

Challenges

The CSSF will conduct a thorough review, and businesses should be prepared for delays or requests for additional information. The approval process may take several months, depending on the complexity of the application. Luxembourg enforces strict anti-money laundering and know-your-customer regulations for crypto-asset service providers. These regulations require businesses to implement robust customer due diligence measures and transaction monitoring systems to ensure compliance.

Ireland

CBI · Central Bank of Ireland

No authorisations yet

Advantages

A license from the Central Bank of Ireland ("CBI") adds credibility and trust to crypto businesses, which is essential when working with institutional investors or entering partnerships with other regulated entities. Ireland has a highly educated and multilingual workforce, particularly in finance, technology, and legal sectors. This is beneficial for crypto companies seeking skilled professionals in areas such as compliance, blockchain development, legal advice, and cybersecurity.

Challenges

The application process for CASP authorisation with the CBI is thorough and may be time-consuming. Given the rigorous nature of requirements, compliance costs can be high. You may need to invest in legal, audit, and risk management services to ensure full adherence to regulatory expectations. Additional costs arise from maintaining a compliance team, conducting regular internal audits, and ensuring that all activities are in line with the CBI's guidelines. These costs can be burdensome, particularly for smaller companies or startups that may not have the resources to support these operations at the outset.

Note: All data is based on the ESMA CASP register issued on 3/31/25.

As detailed above, there are numerous advantages and challenges associated with each member state. Accordingly, a prospective crypto-asset service provider needs to balance such inputs against its internal desires and its long term strategic plans. Regardless of the member state, the application process and post-authorisation maintenance is a significant investment. Applicant firms should be prepared to produce significant application materials, including policies, procedures, and business plans, in order to move as quickly as possible to authorisation.

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Disclaimer RegSurety is a regulatory infrastructure company, not a law firm. Our articles reflect our perspective based on publicly available information and should not be taken as legal advice. Licensing decisions should be made in consultation with qualified counsel.