The Challenges of Becoming a VASP or CASP Under MiCA
What Does It Mean to Be a VASP or CASP?
When discussing crypto regulation, two terms frequently appear: VASP and CASP.
VASP (Virtual Asset Service Provider) is the global term used by the Financial Action Task Force (FATF). It covers businesses providing exchange, custody, transfer, or similar services involving crypto assets.
In essence, CASP is the EU’s implementation of the global VASP concept. From 2025 onwards, MiCA requires that any company operating in the EU as a crypto exchange, wallet provider, OTC desk, broker, or stablecoin issuer must obtain CASP authorization to operate legally.
MiCA itself is not a license. It is the law that mandates CASP authorization as the official entry point for crypto businesses in the European Union.
Licensing Complexity Under MiCA
Applying for CASP authorization under MiCA is a demanding process. Companies must submit extensive documentation to their national regulator, including governance structures, AML/KYC policies, internal risk management procedures, and detailed business models.
Regulators then conduct a thorough review, often requesting clarifications or additional documentation. This can delay approval for months, leaving businesses unable to scale or expand in the EU until authorization is granted.
For startups and scaleups, such delays can be particularly damaging, as they may miss critical market opportunities or lose momentum in fundraising rounds.
High Compliance and Capital Costs
One of the biggest challenges of becoming a CASP under MiCA is the cost.
MiCA sets minimum capital requirements, typically between €125,000 and €150,000 depending on the type of service. For smaller firms, tying up this much regulatory capital creates a significant financial burden.
On top of that, businesses must maintain dedicated compliance teams. CASPs are required to implement bank-level AML/KYC systems, continuous monitoring, and detailed reporting obligations.
Legal and administrative costs are also high. Drafting compliant documentation, preparing whitepapers, undergoing audits, and managing interactions with regulators can easily push the overall cost of becoming and remaining a CASP into six figures annually.
Operational Burden for Startups and Scaleups
For younger companies, the operational burden of meeting MiCA’s CASP requirements can be overwhelming. Before launching, they must not only build their product but also establish full compliance departments, AML/KYC workflows, and audit-ready reporting systems.
This significantly increases time-to-market and shifts resources away from innovation. Even scaleups with existing traction often need to restructure internal teams and processes to meet MiCA’s standards.
While the regulation promises long-term stability, it risks slowing down innovation in Europe, as smaller players may relocate to jurisdictions with more accessible regulatory regimes.
Risks of Non-Compliance
Operating without CASP authorization under MiCA is not an option. From 2025, doing so will be explicitly prohibited and subject to fines, legal action, and enforcement measures.
Beyond legal penalties, non-compliance carries reputational risks. Banks, investors, and institutional partners are unlikely to collaborate with unlicensed firms. For businesses seeking credibility, CASP authorization is indispensable if they intend to serve the EU market.
Looking Beyond MiCA — Alternative Compliance Paths
For companies targeting EU customers, compliance with MiCA through CASP authorization is unavoidable. But MiCA is not the only framework available globally.
Switzerland, for example, uses a Self-Regulatory Organization (SRO) model under FINMA oversight. While it does not replace CASP licensing for EU operations, it provides recognized AML/KYC compliance, access to banking, and international credibility.
The Swiss SRO process is generally faster, more cost-efficient, and more flexible than CASP authorization under MiCA. This makes it attractive for companies with a global focus that do not rely exclusively on the EU market.
How We Support Businesses in Navigating MiCA and Beyond
Deciding whether to pursue CASP authorization in the EU or explore alternatives like Swiss SRO membership depends on your business model, geography, and strategic goals.
We don’t issue licenses ourselves - instead, we advise, guide, and support companies throughout the process of achieving compliance.
For CASP applicants under MiCA, we assist with:
Preparing documentation for regulators.
Designing AML/KYC frameworks aligned with MiCA standards.
Managing communication with EU authorities.
For companies considering Switzerland, we help with:
MiCA is the law that will define crypto regulation in the European Union from 2025 onward. It introduces CASP authorization as the mandatory gateway for any crypto business that wants to operate legally in the EU.
Becoming a CASP under MiCA is complex, costly, and resource-intensive. For EU-focused businesses, it is unavoidable. But for those with global ambitions, Switzerland’s SRO model can deliver many of the same compliance benefits — AML/KYC credibility, access to banks, and international trust — in a faster and more efficient way.
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Contact us today
to explore the best compliance path for your crypto business — CASP under MiCA or Swiss SRO membership.