Impact of Markets in Crypto Assets Regulation (MiCAR) on Virtual Asset Services Providers

Page last updated 2 May 2024

This page provides information on the impact of the MiCAR on VASPs as well as guidance on appropriate application process for firms considering a registration application.

The Markets in Crypto Assets Regulation (MiCAR) will become applicable for Crypto Asset Service Providers (CASPs) from 30 December 2024. After this date, any firms seeking to establish themselves in Ireland to offer any CASP services will firstly need to be authorised by the Central Bank of Ireland.

Under the existing Virtual Asset Services Providers (VASP) regime, introduced in April 2021, firms seeking to provide any VASP activities are required to be registered by the Central Bank as a VASP prior to the commencement of operations.

For more detail on what constitutes a CASP service, see our MICAR page.

Transitional period

Under MiCAR, firms registered and operating under the VASP regime prior to 30 December 2024 will be permitted, post 30 December 2024, to avail of a transitional period enabling them to continue to operate for up to 12 months or until their CASP authorisation is granted or refused, whichever is sooner. Consequently, only those firms that have been registered as a VASP, and provided their services in accordance with applicable law prior to 30 December 2024 can avail of the MiCAR transitional arrangements.

All registered VASPs that intend to continue to operate following the 12 month transitional period, i.e. post 30 December 2025, will require a CASP authorisation from the Central Bank prior to 30 December 2025. A VASP availing of the transitional arrangements that does not apply for a CASP authorisation, or whose application is refused, will be required to cease VASP operations by 30 December 2025 or when their CASP application is refused, whichever is sooner.

The current VASP regime relates solely to Anti-Money Laundering, Countering the Financing of Terrorism and Financial Sanctions (AML/CFT/FS). Consequently, applicant firms are assessed only on the effectiveness of their AML/CFT/FS frameworks, policies and procedures and the fitness and probity of management and beneficial owners.

CASP authorisation

A CASP authorisation assessment is significantly broader and more substantial than a VASP registration. Therefore, CASP applicants should be aware that a VASP registration provides no indication of the outcome of a CASP assessment. Furthermore, a VASP registration does not lead to a simplified CASP assessment.  All CASP applications will be deemed a new authorisation application and be assessed in line with the requirements of MiCAR. The Central Bank will take existing supervisory history and engagement with a firm into consideration as part of the authorisation assessment.

The Central Bank’s experience of assessing applications for VASPs, since commencement of the regime in April 2021, highlights that a period of at least ten months is required to conclude the assessment of a VASP application. Therefore, firms that are considering providing CASP services should focus their efforts on preparing for a CASP application rather than seeking a VASP registration at this time. Individual potential VASP applicants who have engaged with the Central Bank on a pre-registration basis have been advised of this in recent months.

For clarity, any applicant firm that is not registered and operating as a VASP by 30 December 2024 cannot avail of the transitional arrangements under MiCAR and will not be permitted to operate as a CASP until authorisation has been granted via the CASP authorisation process.

For further information on MiCAR implementation, please visit our MiCAR industry webpage.The Central Bank will issue further communications regarding the authorisation and notification processes under MiCAR in due course.  In the meantime, regulated entities and existing VASP applicants who have engaged with the Central Bank on a pre-registration basis should direct any queries to their supervision or authorisation team. In the case of firms who have not previously engaged with the Central Bank and who are seeking to establish themselves in Ireland to offer any CASP services, please engage with our Innovation Hub ([email protected]) in the first instance.

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