Capital and Governance Requirements for CASP in Europe

As the EU MiCA (Markets in Crypto-Assets) regulation takes full effect in 2026, understanding the capital and governance requirements for CASP (Crypto-Asset Service Provider) licenses is critical for crypto operators seeking legal and compliant operations in Europe. Proper structuring ensures regulatory approval, investor confidence, and seamless EU passporting.

Minimum Capital Requirements for CASPs

Capital requirements depend on the type of crypto services provided:

• Advisory Services: Minimum €50,000
• Custody or Exchange Services: Minimum €125,000
• Trading Platforms: Minimum €150,000+

Additional reserves may be required depending on operational volume, risk exposure, and compliance complexity. Maintaining sufficient capital is a key MiCA requirement for CASPs.

Governance Requirements for CASPs

European regulators require robust governance structures to ensure operational integrity:

• Qualified Directors: Experience in financial services, risk management, or compliance.
• Compliance Officers: Oversee AML/KYC, internal audits, and regulatory reporting.
• Operational Hierarchy: Clear roles and responsibilities to prevent conflicts and ensure accountability.
• Functional EU Presence: Decision-making must occur within an EU member state.
• Internal Controls and Risk Management: Policies covering IT security, transaction monitoring, and contingency procedures.

Strong governance not only satisfies regulatory obligations, but also enhances investor and banking confidence.

AML, Compliance, and Operational Policies

CASPs must implement comprehensive operational frameworks:

• AML/KYC Programs: Client verification, risk scoring, and ongoing monitoring.
• Transaction Monitoring: Detect suspicious activity in real time.
• Cybersecurity Protocols: Secure wallets, data encryption, and incident reporting.
• Internal Audits: Regular reviews to ensure policies align with MiCA standards.

These measures are crucial for both regulatory compliance and operational resilience in the EU crypto market.

Company Formation and Ownership Requirements

Before applying for a CASP license, a legal entity must be established, such as Société à responsabilité limitée (S.à r.l.) in Luxembourg or an equivalent EU entity. Key points include:

• 100% Foreign Ownership Permitted
• Minimum Share Capital: €12,000–€50,000 depending on license type
• MiCA-Compliant Corporate Governance: Transparent ownership and reporting
• Fast Incorporation: Typically 5–10 business days

Establishing a compliant legal entity is a prerequisite for regulatory approval and EU passporting.

Implications for EU Crypto Operators

1. Regulatory Readiness: Adequate capital and governance structures are non-negotiable for CASP licensing.
2. Investor Confidence: Well-governed CASPs attract institutional investors and banking partners.
3. Operational Security: Proper governance reduces operational and compliance risks.
4. EU Passporting: Compliance with capital and governance standards allows service expansion across the EEA.

FAQ — Capital and Governance for CASPs in 2026

What is the minimum capital for a CASP in Europe?

• €50,000 for advisory, €125,000 for custody/exchange, €150,000+ for trading platforms.

Are local directors required?

• Yes, functional presence and decision-making must be within an EU member state.

Do governance requirements include cybersecurity and internal audits?

• Absolutely, regulators require robust policies for AML, cybersecurity, and internal controls.

Can a CASP operate across the EU with these structures?

• Yes, once licensed, EU passporting allows cross-border services throughout the EEA.