Manimama's experts are well versed in the complexities of cryptocurrency regulation and are committed to sharing their findings with businesses and individuals navigating this dynamic sector
Indeed, our legal team recently finalized a comprehensive study on the national implementation of the Markets in Crypto-assets Regulation (MiCA) in various EU countries. The legal research not only highlights the differences in how MiCA is adopted at the national level, but also offers standard rules for compliance. Today we offer you an insight into the specifics of obtaining a cryptocurrency license in Luxembourg under the new MiCA provisions.
Current requirements (prior to MiCA implementation)
No persons established in Luxembourg or providing services in Luxembourg may not provide virtual asset services without registering with La Commission de Surveillance du Secteur Financier (“CSSF”), as provided for in Article 7-1(1) of the Law of November 12, 2004 on the fight against money laundering and the financing of terrorism (the “AML/CFT Law”).
According to Articles 1(20c) and 7-1(1) of the AML/CFT Law, organisations that are established or provide services in Luxembourg must register with the CSSF if they provide one or more services on behalf of or for their clients that are included in the VASP list of services. Any entity, including any entity already licensed/registered by a competent authority and in particular licensed financial institutions, which offers or intends to offer any of the virtual asset services as from 30 March 2020 has to:
– register beforehand as a VASP; and
– comply with the professional obligations and the conditions described in the AML/CFT Law, as amended by the March 2020 Laws.
1. The registration procedure generally starts with a meeting at the CSSF premises aiming to present the applicant and its project. Depending on the activities of the project, registration as a VASP may be necessary.
2. In case the applicant submits a formal registration file to the CSSF for registration, it must include all the documents and information required by using the relevant forms made available on the CSSF website (application).
3. The registration file shall exclusively be provided to the CSSF in an electronic form via the MFT (Managed File Transfer) system of the CSSF, for which the required link will be provided to the applicant by the CSSF (upon request to the following email address ipig@cssf.lu). The CSSF then examines the registration file.
4. The registration is effective upon inclusion of the applicant in the CSSF register. After the registration has been completed, the registered entity is published in the national public register maintained by the CSSF.
5. If, after the registration, significant changes to the activities or to the key function holders notified upon registration occur, the registered entity has to immediately inform the CSSF in writing.
Has the jurisdiction enacted a law/draft law implementing MiCA?
Draft Bill №8387 PL MICA TFR
Who is the regulator under the law/draft law implementing MiCA?
Commission de surveillance du secteur financier (“CSSF”)
Requirements for future CASPs stipulated by the national legislation implementing MiCA, the presence of national peculiarities
The requirements for future CASPs under the draft law under consideration fully coincide with the requirements set forth in the 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
The draft law does not provide for specific deadlines, but based on the essence of the draft law, the period of time by which CASPs must comply with the new requirements is the same as the transition period. All CASPs that intend to register after December 30, 2024, will already be doing so under the new legislation and will have to fully comply with the MiCA requirements. All those who register before December 30, 2024, will have to comply with the requirements, along with the order of entry into force of the various provisions of the MiCA. The deadline for applying for a permit and, accordingly, the deadline by which the CASP must comply with the new requirements is July 1, 2026.
Is there a transition period before the full implementation of MiCA?
The draft law abolishes, as of December 30, 2024, the registration provision currently provided for VASPs in the amended law of November 12, 2004 on combating money laundering and terrorist financing. Although the registration procedure is abolished on that date, VASPs already registered in the register established by the CSSF before December 30, 2024, will remain registered until July 1, 2026, or until they are granted or denied approval in accordance with Article 63 of Regulation (EU) 2023/1114, whichever event occurs first.
During this transitional phase, VASPs remain subject to the professional obligations set out in the 2004 law and are treated as cryptoasset service providers for the purposes of Regulation (EU) 2023/1113. The CSSF also remains the supervisory authority for already registered VASPs, which will be given the time necessary to obtain their approval for CASP status, where applicable.
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.
The relevant provisions have not yet been adopted.
Liability provided for CASPs that continue to operate at the place of registration without meeting the new requirements
The following types of punishment are provided for CASPs:
– warning
– reprimand
– an order obliging the individual or legal entity responsible for the violation to cease the conduct constituting the violation and refrain from repeating it;
– administrative fines: in the case of an individual – up to EUR 700,000, in the case of a legal entity – in the maximum amount of EUR 5,000,000
– 5% of the total annual turnover of the legal entity, as shown in the latest available financial statements approved by the management body
Manimama Law Firm 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.
