A legal person or other undertaking

14 July 2023


Crypto-asset services can only be provided (a) by a legal person; or (b) by another undertaking that was authorised as a CASP (Article 59-1(a) MiCA).

They may also be provided by specific financial entities that are allowed to provide crypto-asset services: (c) a credit institution authorised under Directive 2013/36/EU (Article 59-1(b) MiCA; Article 3-1(28) MiCA), (d) a central securities depository authorised under Regulation 909/2014/EU (Article 59-1(b) MiCA), (e) investment firm authorised under Directive 2014/65/EU (Article 59-1(b) MiCA; Article 3-1(29) MiCA), (f) market operator authorised under Directive 2014/65/EU (Article 59-1(b) MiCA), (g) an electronic money institution authorised under Directive 2009/110/EC (Article 59-1(b) MiCA; Article 3-1(43) MiCA), (h) an UCITS management company authorised under Directive 2009/65/EC or Directive 2011/61/EU (Article 59-1(b) MiCA; Article 3-1(47) of MiCA), or (i) an alternative investment fund manager (Article 59-1(b) MiCA; Article 3-1(48) MiCA).

As can be observed, crypto-asset services are generally provided only by legal persons that have a registered office in a EU Member State and in which they carry out substantive business activities, including the provision of crypto-asset services (Recital (74) MiCA).

CASPs may be legal persons of various types, in particular commercial companies under different social forms, such as a Public Limited Company (Société Anonyme or S.A.), a Private Limited Company (Société à Responsabilité Limitée or S.à r.l.), a Partnership Limited by Shares (Société en Commandite par Actions or S.C.A.), or a European Company (Societas Europaea or S.E.).

In theory, civil companies, non-profit organisations (a.s.b.l.) and foundations could also be CASPs. However, this possibility is only theoretical. If these entities provide crypto-asset services only on an incidental manner, it is possible that they may not be considered as providing these services “on a professional basis” which is a condition for a legal person to require a CASP authorisation and be authorised as a CASP (please see “On a professional basis”). On the other hand, if these entities provide the said services (commercial in nature) on a professional basis, as their main or primary activity, they may be doing it against their established social form or their bylaws. These entities risk therefore being characterised as a 'trader by form’ after exercising acts of commerce and doing so as their usual profession (Article 1 Luxembourg Commerce Code) and/or potentially be dissolved as a consequence. In turn, both sanctions could entail a certain number of other legal and fiscal consequences.

B) Other undertakings

The terms “other undertaking that has been authorised as crypto-asset service provider” (point (b) hereinbefore) may exceptionally aim undertakings that are not legal persons, but only if (a) their legal status ensures a level of protection for third parties’ interests (clients) equivalent to that afforded by legal persons and only if (b) they are subject to equivalent prudential supervision appropriate to their legal form (Article 59-3 MiCA). These two conditions are cumulative. This may be for example the case of commercial partnerships (Recital (74) MiCA).

However, these terms (the terms “other undertaking that has been authorised as crypto-asset service provider”) do not suggest, in our understanding, that natural persons can generally be authorised as CASPs. Indeed, their legal status does not ensure a level of protection for clients equivalent to that afforded by legal persons (e.g., they have no capital to fulfil the minimum capital requirements provided by Article 67 MiCA). This interpretation is further supported by the demanding list of information required for a CASP application, which also includes proof regarding “members of the management body” and the “identity of any shareholders and members, whether direct or indirect” (Article 66-2(g) and (h) MiCA). Furthermore, whenever MiCA allows a “natural person” to perform a certain activity (in addition to legal persons and other undertakings), it explicitly provides it so in parallel to “other undertakings” - e.g., the issuer and the offeror of a crypto-asset may be “a natural or legal person, or other undertaking” (Article 3-1(10) MiCA; Article 3-1(13) MiCA). Such is not the case of CASP definition, which makes no parallel reference to natural persons.

If this interpretation is correct, then crypto-asset services cannot be provided by natural persons (individuals), which contrasts with virtual asset services. The latter may, in certain States, be provided by “any natural or legal person who is not covered elsewhere under the [FATF] Recommendations” (FATF, Virtual asset guidance, §44; Current Article 7-1(2)(a) Luxembourg AML Law).

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