MiCAR Series: Week 2 – CBI Guidance for VASPs Transitioning to CASPs

In this second article of our Markets in Crypto Assets (MiCAR) series, we examine the Central Bank of Ireland’s (CBI) guidance for Virtual Asset Service Providers (VASPs) applying as Crypto Asset Service Providers (CASPs) under MiCAR.

The EU’s Fifth Anti-Money Laundering Directive (5AMLD) extended Anti-Money Laundering and Countering the Financing of Terrorism (AML/CFT) obligations to entities providing virtual asset services. In response, the CBI introduced the VASP regime in April 2021, requiring firms to register before offering VASP activities. This regime focuses solely on AML/CFT compliance, assessing applicants' AML/CFT frameworks and the fitness and probity of management and beneficial owners.

MiCAR becomes applicable for CASPs from 30 December 2024. From this date, firms offering CASP services in Ireland must first be authorised by the CBI.

Firms registered under the VASP regime before 30 December 2024 can continue operating during a 12-month transitional period or until their CASP authorisation is granted or refused. Only firms compliant with the VASP requirements before this date can benefit from these transitional arrangements.

A VASP using the transitional period must cease operations by 30 December 2025 if they do not apply for CASP authorisation or if their application is refused.

Current and prospective VASPs should plan for the CASP authorisation process as soon as possible. The application is extensive and resource-intensive, often taking months to complete. Early preparation is crucial, especially with the anticipated surge in CASP applications.

To recap on the MiCAR Series Week 1 article, click here.

How can we help?

Navigating the changing landscape for crypto assets under MiCAR is a new challenge for businesses. Our Prudential Risk experts recognise that regulations remain a pivotal driver for the strategic priorities of financial institutions. We can assist your business prepare for and onboard these new regulations within the financial services sector. We work in tandem with our clients to identify their regulatory responsibilities and develop strategies for full compliance.

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