Successful MiCAR Licensing In Austria: FMA Publishes Roadmap For Crypto-asset Service

As the regulatory landscape for crypto-assets undergoes a
significant transformation with the European Union’s
implementation of the Markets in Crypto-Assets Regulation
(MiCAR, Regulation (EU) 2023/1114), attention
turns to the preparatory steps entities must take to comply with
these new standards. Against this backdrop, the Austrian Financial
Market Authority (FMA) has recently published
preliminary guidance on the MiCAR licensing process for
crypto-asset service providers (CASPs). These
guidelines outline the steps CASPs need to consider and the
FMA’s expectations in the lead-up to full MiCAR applicability
after 30 December 2024.

MiCAR preliminary process with FMA

As of March 2024, CASPs cannot yet apply for a MiCAR licence.
However, the FMA has recognised that early engagement is vital for
an efficient licensing procedure for both CASPs and the FMA, as the
competent regulator. Initiating dialogue provides valuable insights
into the regulatory expectations and helps businesses adjust their
models and compliance strategies to meet the FMA’s standards.
Companies that intend to apply for a MiCAR licence and that have
conducted preliminary steps internally and with their legal counsel
can contact the FMA from March 2024 onwards. This opportunity
provides companies with the chance to align their application with
regulatory standards and seek clarification on any aspects of the
licensing process.

FMA questionnaire on regulatory readiness

The FMA has introduced a detailed questionnaire to test and
demonstrate CASPs’ readiness in aspects such as operational
experience, financial stability, compliance history, business model
complexity and a thorough understanding of the regulatory
landscape. Thoughtful engagement with this questionnaire is
essential to illustrate a business’s alignment with the
FMA’s standards.

Application process overview

The authorisation timeline is influenced by the quality of the
application, the complexity of the business model, and adherence to
regulatory standards. Therefore, ensuring a comprehensive and
well-prepared application is important for navigating the
authorisation process effectively.

The FMA illustrates the following steps on the road to a
successful MiCAR licence application:

source: https://www.fma.gv.at/querschnittsthemen/markets-in-crypto-assets-regulation-micar/road-map-fuer-crypto-asset-service-provider-casp/

Recommendations for CASP applicants

The FMA’s guidance includes specific recommendations for
CASP applicants to enhance their readiness for MiCAR
compliance:

• Clear scope: Applicants should clearly define
  which MiCAR services apply to their business, supported by a legal
  assessment and detailed business activity descriptions.
• Organisational readiness: An evaluation and
  adjustment of the organisational structure and operations to meet
  MiCAR requirements are recommended.
• Legal advisory: Consulting with legal experts
  is helpful for refining the application and aligning with the
  FMA’s feedback.
• AML and CFT compliance: Establishing stringent
  KYC, anti-money laundering and counter-terrorist financing measures
  is essential for a successful authorisation.

Conclusion

The introduction of MiCAR presents both challenges and
opportunities for the crypto-asset sector within the EU.
Understanding and preparing for the FMA’s requirements are
crucial steps in navigating the new regulatory environment. To
assist CASPs in preparing comprehensive and timely MiCAR licence
applications, the FMA’s guidance can serve as an initial source
of valuable information, to be ready as soon as the FMA accepts the
first MiCAR licence applications (expected in late summer or
October 2024).

The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.