Implementation of MiCA

The MiCA regulations will enter into force on January 1, 2025. Europe, including Poland, will see major changes in the regulatory environment for crypto assets. According to MiCA's requirements, all businesses that currently hold a Virtual Asset Service Provider (VASP) license must transition to operate under the new Crypto Asset Service Provider (CASP) license.

Transition period for MiCA in Poland

In order for VASP to adapt to the new regulations and obtain a CASP license, MiCA set a transition period.

According to the draft of Poland's Crypto Asset Market Act, entities in the Polish VASP register before 30 December 2024 can continue to operate under the existing anti-money laundering (AML) regulations until 30 June 2025. However, to continue operating after this date, VASP must obtain a CASP license in accordance with MiCA.

Key points of the transition period

Audit process

During the transition period, the regulator may conduct an audit of the VASP to assess its readiness to transition to MiCA standards and to ensure compliance. Here are the relevant key points:

Advance notice: Before the audit, the regulator will give advance notice and the company will have 7 to 30 days to prepare.

Audit content: The notice usually describes the focus of the audit, such as verifying the qualifications of management members or checking the implementation of anti-money laundering (AML) obligations.

Qualification requirements: Management members are required to provide proof of relevant qualifications, such as training certificates or documentation of at least one year of virtual currency-related experience. In addition, a certificate of no criminal record is required to meet the requirements of the Polish AML legislation.

Risk of audit refusal: If a business refuses to accept an audit notice, it may be at risk of being removed from the VASP register.

Prepare in advance: It is important to organize compliance documents in advance to ensure that the audit goes smoothly and avoid unnecessary trouble.

Regulation

During the transition period, Poland's VASP will continue to be supervised by the General Monitoring of Financial Information (GIIF).

Existing AML obligations still apply.

IMPORTANT:

The provisions of Poland's draft Crypto Asset Market Act are still in the public consultation stage and are subject to change.

It is not clear how applications submitted after 30 December 2024 but before 30 June 2025 will be processed.

Key steps in applying for CASP

To successfully transition from VASP to CASP, organizations need to establish a comprehensive compliance framework that meets MiCA requirements. The following are some important preparations (please note that the specific application conditions are subject to the finalization of Poland's Crypto Asset Market Act and may be adjusted):

1. Capital requirements

MiCA sets specific capital thresholds for different service types:

Consulting services and order execution: € 50,000

Escrow services or crypto-to-fiat exchange services: € 125,000

Trading platform operation: € 150,000 In addition, CASP is required to maintain a 1/4 capital reserve equivalent to the fixed expenditure of the previous year in order to cope with the uncertainty.

2. Separate fund account obligations

CASP must set up an independent fund account with a recognized credit institution or central bank to manage customer funds separately from operating assets.

3. DOCUMENT REQUIREMENTS

The European Securities and Markets Authority (ESMA) has identified detailed documentation requirements in its Regulatory Technical Standards (RTS), including:

Operating Plan: Details of services to be provided, jurisdictions to be covered, marketing strategy and financial projections.

Governance policy: internal control mechanisms, organizational structure, and assignment of responsibilities to compliance staff.

Business Continuity Plan: A strategy to ensure continued service delivery in a crisis situation.

AML Documents: Policies for Money Laundering and Terrorist Financing Risks.

Customer asset separation policy: the operational process to protect customer funds.

Complaint Handling Procedure: A system for managing customer complaints.

CASP License Preparation Advice

Planning ahead: Given the comprehensiveness of MiCA's compliance requirements, VASP should start preparations as early as possible, with clear timelines and milestones.

Audit preparation: Internal audits are conducted to identify compliance gaps and ensure that audit documentation is complete.

Professional services: Engage legal and compliance experts with MiCA and Polish regulatory experience to help resolve complex requirements.

Drafting documents: Customizing compliance documents based on the unique operations and structure of the business.

Disclaimer:

This blog was created in November 2024. Please note that due to changes in laws, regulations or industry practices, the information provided herein may no longer be applicable. Readers are advised to verify the current accuracy of these before relying on them.