Whose occupation or business is the provision of one or more crypto-asset services to clients

12 July 2023

The terms “provision of one or more crypto-asset services” encompass all services and activities, relating to a crypto-asset, that may be provided in the course of a crypto-asset service covered by MiCA (Article 3(15) MiCA). They also imply that a legal person or other undertaking may provide, and be authorised to provide, more than one type of crypto-asset services.

The final terms “to clients” aim any services and activities relating to crypto-assets that may be provided, in the course of a crypto-asset service, to another external person, as opposed to or on behalf of itself. This suggests a business relationship and excludes activities conducted solely for personal use or within a closed network or system where no services are provided to external parties. Generally, this “external party” may be called “third-party”, “customer” or “client”, that is, any natural or legal person to whom a CASP may provide crypto-asset services (Article 3(39) MiCA).

A UCITS management company or an Alternative fund investment manager may provide crypto-asset services in the EU equivalent to the management of portfolios of investments and non-core services (Article 60-5 MiCA). In this case, the UCITS management company or the Alternative fund investment manager would be performing those services on behalf of its “investors” or “unit-holders”, which would then be considered the “third-parties” or “clients” of the Fund manager (by analogy with VASPs: Ministry of Justice, ML/TF Vertical risk assessment: VASP, pp. 9, 15 & 42).

Legal persons or other undertakings which solely provide ancillary infrastructure to allow another entity to offer CASP services usually do not meet the CASP definition, to the extent that their occupation or business is not the provision of any crypto-asset services to clients.

Having regards to all foregoing explanations, are not considered CASPs the following entities:

  • hardware or software providers of non-custodial wallets (Recital (83) MiCA);

  • persons who provide crypto-asset services exclusively for their parent companies, for their subsidiaries or for other subsidiaries of their parent companies (not for clients nor for third parties) (Article 2-2 (a) MiCA);

  • a liquidator or an administrator acting in the course of an insolvency procedure (Article 2-2(b) MiCA), except when acting as an issuer of asset-referenced tokens who draw up and maintain an operational plan to support the orderly redemption of each asset-referenced tokens, which is to be implemented upon a decision by the competent authority that the issuer is unable or likely to be unable to fulfil its obligations, including in the case of insolvency or resolution (Article 47-1 MiCA);

  • the European Central Bank (Article 2-2(c) MiCA);

  • national central banks of EU Member States when acting in their capacity as monetary authority or other public authorities of EU Member States (Article 2-2(c) MiCA);

  • the European Investment Bank including its subsidiaries (Article 2-2(d) MiCA);

  • the European Financial Stability Facility and the European Stability Mechanism (Article 2-2(e) MiCA);

  • public international organisations (Article 2-2(f) MiCA).

Most of these exceptions indicate entities that are somehow involved in the crypto-asset space but in a peripheral or supportive role, not as primary provider of crypto-asset services to clients.

Copyright © 2024 Ruben Mendes ( CASP ).