Current requirements (prior to MiCA implementation)
To get authorisation from BaFin you need to:
1. Establish a local LLC with authorised capital of 150,000 euros.
2. Have a competent and reliable director
3. Appoint a competent and reliable AML officer and deputy AML officer
4. Have a local physical office
5. At least one director must be local
6. Write AML documentation
7. Write IT documentation
8. Write a business plan
9. Documents that confirm the reliability of the AML officer, his/her deputy, shareholders and directors.
10. Make an application to the BaFin together with the above mentioned documents and documents confirming the authorised capital, availability of a local office. The application should also contain information about the founders, directors, and the company.
A fee of €10,750 is required to be paid to the regulator for the application
Has the jurisdiction enacted a law/draft law implementing MiCA?
Who is the regulator under the law/draft law implementing MiCA?
The Federal Financial Supervisory Authority (“Bafin“) in cooperation with the Central bank of the Federal Republic of Germany (“Deutsche Bundesbank“)
Requirements for future CASPs stipulated by the national legislation implementing MiCA, the presence of national peculiarities
Meet the requirements set out in MiCA.
The period of time by which the CASP must comply with the new requirements, as well as the procedure for notifying the regulator of compliance with the new requirements
According to Part 8, Paragraph 50 of the Act on the Digitalization of the Financial Market, companies with a license as of December 29, 2024 in Germany may continue to operate; the license is deemed to continue in force either until a decision is received in the simplified authorization procedure or until December 31, 2025 .
The draft bill introduces a simplified procedure for already regulated institutions (for companies already holding a license), and also allows applications to be submitted before the MiCAR becomes fully applicable (enables applications to be submitted before MiCAR comes into full force on December 30, 2024). The provisions allowing applications to be submitted before the full application of MiCAR (MiCAR-AntragsV) expire on 29 December 2024.
Applications for the simplified procedure may be submitted by 31 August 2025 (electronically).
The application shall:
– specify the crypto-asset services for which authorisation is requested pursuant to Article 3 paragraph 1 Number 16 of Regulation (EU) 2023/1114.
– contain confirmation that the business model has remained unchanged and that the documents and information available to the Bafin have been in particular in connection with corporate governance and risk management
– contain an updated business plan indicating in which Member States the applicant intends to provide crypto-asset services including the place and manner of marketing these services;
– contain the strategies and procedures for compliance with Chapters 2 and 3 of Title V of the Regulation (EU) 2023/1114, a description of the procedures relating to interests conflicts
– other specific confirmations depending of the nature of crypto-asset services.
If the documents of the Federal Institute already exist, the documents do not have to be submitted again. The applicant should refer to these documents.
At the request of the Federal Office, further information and further documents must be provided.
Under Article 143(3) of Regulation (EU) 2023/1114 and in accordance with current legislation, companies that carry out activities that did not previously require a permit must informally notify BaFin of their activities by August 1, 2024.
Is there a transition period before the full implementation of MiCA?
The bill allows for a simplified procedure by which institutions that already have a national license for cryptoasset services can obtain a MiCAR license under simplified conditions – applications can be submitted until August 31, 2025. Decisions on applications are made by December 31, 2025.
The ability of a CASP from a jurisdiction with a transition period to operate freely in a jurisdiction without a transition period starting from January 1, 2025.
These provisions have not yet been adopted.
Liability provided for CASPs that continue to operate at the place of registration without meeting the new requirements
Bafin may order the immediate cessation of business operations and the immediate settlement of the transactions against the company, its shareholders and the members of its executive bodies if the company operates without the authorisation required under MiCAR.
Bafin can issue instructions for liquidation and may apply the liquidator for insolvency proceedings on the assets of the company.
Imprisonment of up to five years or a fine shall be imposed on anyone who:
– provides crypto-asset services without authorisation required in Article 59 paragraph 1 MiCAR;
– violates Article 16 paragraph 1 subparagraph 1 letter a MiCAR, publicly offers an asset-related tokens;
– violates Article 48 paragraph 1 subparagraph 1 letter a MiCAR, publicly offers an electronic money tokens.
Manimama Legal & Growth Agency provides a gateway for the companies operating as the virtual asset wallet and exchange providers allowing to enter to the markets legally. We are ready to offer an appropriate support in obtaining a license with lower founding and operating costs. We offer KYC/AML launch, support in risk assessment, legal services, legal opinions, advice on general data protection provisions, contracts and all necessary legal and business tools to start business of virtual asset service provider.
The content of this article is intended to provide a general guide to the subject matter, not to be considered as a legal consultation.
