What a MiCAR licence means for Bitcoin clients
Learn which Bitcoin services MiCAR regulates, how to verify a provider’s legal entity and service scope, and why authorization does not remove risk.
Direct answer
MiCAR is an EU framework for defined crypto-asset services; a licence or authorisation must be read by legal entity, covered service and contract, not as a blanket safety guarantee.
The Markets in Crypto-Assets Regulation, known as MiCAR, creates an EU framework for issuing crypto-assets and providing defined crypto-asset services. A company that provides covered services professionally may need authorization as a crypto-asset service provider, or CASP.
Authorization matters because it places the provider within a supervisory framework. It does not make bitcoin risk-free, guarantee investment returns or cover every service offered by a group of companies.
What is MiCAR?
MiCAR is the EU Markets in Crypto-Assets Regulation. It creates a framework for issuing crypto-assets and providing defined crypto-asset services, and can require a provider that offers covered services professionally to be authorised as a crypto-asset service provider, or CASP.
Which services can fall within MiCAR?
MiCAR defines a list of crypto-asset services that can include custody and administration, operating a trading platform, exchanges, executing orders, advice and portfolio management. The exact duties vary by service.
Why do legal entity and service scope matter?
Authorisation belongs to a specific legal entity and covers specific services. A brand name alone does not show which entity provides a service, so clients should check the legal entity, service agreement and relevant official register.
Some digital-asset services may fall outside MiCAR or be provided by another legal entity. Lending is an example where the contracting entity and applicable framework must be identified separately.
What can authorisation require?
MiCAR can impose organizational, governance, conduct and information requirements. Depending on the service, these can include safeguarding client assets, complaint handling, conflict management and information about costs and risks.
Authorization does not guarantee bitcoin’s price, remove market or operational risk, or mean that every product or group company is regulated.
Does MiCAR make bitcoin a bank deposit or provide DGS protection?
No. MiCAR does not turn bitcoin into a bank deposit. De Nederlandsche Bank states that bitcoin is not a bank deposit and is not protected by the Dutch Deposit Guarantee; any euro deposit and bitcoin holding should be assessed separately. Source: De Nederlandsche Bank
How can a client verify a provider?
- Find the provider in the relevant official register.
- Match the legal entity name, not only the brand.
- Check which services the authorization covers.
- Read the terms for custody, withdrawals, fees and complaints.
- Confirm which entity provides any separate banking or lending service.
- Treat claims of guaranteed safety or returns as warning signs.
A MiCAR licence should be read precisely: which entity is authorized, for which services and under which terms.
Frequently asked questions
Does a MiCAR licence make bitcoin risk-free?
No. MiCAR authorisation does not remove bitcoin market, operational, custody or service risk. Check the legal entity, covered service and contract. ESMA guidance
Does MiCAR authorisation cover every company or service in a group?
No. Authorisation belongs to a specific legal entity and service scope. Verify both in the relevant official register and in the service agreement. AFM register
Related: Bitcoin-backed loans: LTV, margin calls, liquidation risks; Bitcoin custody models compared; Bitcoin versus a Bitcoin ETF; Bitcoin tax in the Netherlands.
Primary sources: AFM: CASP licence, AFM: MiCAR, AFM register of crypto-asset service providers, ESMA: MiCA, ESMA consumer factsheet.
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