MiCA CASP Classes - Information Guide (Crypto Asset Service Provider) European Union (EU)

MiCA CASP Classes Information Guide — Crypto Asset Service Provider Authorization Levels

Understanding the Three Authorization Classes Under MiCA

MiCA introduced a landmark shift in EU crypto regulation. Rather than a single license, the new Markets in Crypto-Assets Regulation establishes a tiered authorization system based on the capital-intensive services you provide. The regulatory framework recognizes that a firm offering advisory services operates with fundamentally different risk profiles and capital requirements than a custodian holding billions in client assets.

This classification approach means your CASP class is determined not by the size of your business, but by the most capital-intensive service you offer. Three classes exist. Each has a minimum capital requirement, a defined scope of permitted services, and distinct revenue models.

This guide walks you through what each class entails, how they work in practice, and how to choose the right authorization level for your business model. Whether you’re building a crypto-to-fiat exchange, an advisory platform, or a full custody marketplace, understanding these classes is foundational.

Here’s the regulatory framework at a glance:

Aspect	Class 1	Class 2	Class 3
Minimum Capital	€50,000	€125,000	€150,000
Key Services	Advisory, order routing, reception/transmission	+ Fiat ↔ crypto exchange, crypto trading	+ Custody, administration, marketplace operation
Business Model	Advisors, brokers, order execution agents	Exchanges, OTC desks, trading platforms	Custodians, full-service platforms, fund managers
Capital Determines Class	Limited order flow, no proprietary trading	Own-book trading, market-making	Client asset safeguarding

Class 1: Advisory & Order Services (€50,000)

Class 1 is the entry point to CASP authorization. This class covers the foundational services that crypto businesses provide: giving advice about crypto assets, receiving and transmitting orders from clients, executing those orders, and placing orders with counterparties.

What does “order services” mean in practice? Your firm receives instructions from clients to buy or sell crypto. You then route those orders to an exchange, trading desk, or counterparty — you don’t execute the trade yourself. You are an intermediary. You may execute some orders directly, but you do not hold client funds and you do not operate a trading platform.

Class 1 firms do not hold client crypto or fiat balances. This is why the capital requirement is lowest. Your regulatory risk profile centers on operational resilience, conflict of interest management, and fraud prevention — not asset safeguarding.

Typical Class 1 businesses include cryptocurrency investment advisors, crypto order brokers, fintech firms offering execution services, and trading algorithms that route orders without custodial responsibility. If your revenue comes from advisory fees or per-trade commissions on order flow you facilitate, you’re likely Class 1.

The scope includes:

• Reception and transmission of orders — You take client buy/sell instructions.
• Investment advice — You provide tailored recommendations on crypto asset purchases or sales.
• Execution of orders — You execute on behalf of the client (non-proprietary).
• Placing orders with counterparties — You relay orders to other service providers.

Class 1 is attractive because it has the lowest capital barrier and the simplest operational framework. However, it is also the most restrictive: you cannot run an exchange, you cannot trade for your own account against client orders, and you cannot offer custody. If your business model requires any of these capabilities, you need Class 2 or Class 3.

Class 2: Exchange & Trading Services (€125,000)

Class 2 adds a critical capability: you can operate a trading platform and execute trades as the counterparty to your clients or between clients.

This class is designed for exchanges, OTC trading desks, and market-making operations. The key difference from Class 1 is that you now hold the other side of the trade. When a client wants to buy Bitcoin from your platform, Class 2 allows you to sell Bitcoin from your own inventory. You are the market maker.

The business model of Class 2: You profit from the spread. If you buy Bitcoin at €40,000 and sell at €40,500, the €500 difference is your revenue. Your CASP is the counterparty in each trade. This creates a capital requirement jump from €50,000 to €125,000 because you must hold working capital to fund the other side of trades and manage market volatility.

Class 2 encompasses:

• Everything in Class 1 (advisory, order routing, execution)
• Operating a trading platform — Running an exchange or OTC desk where clients trade
• Fiat-to-crypto services — Buying and selling crypto for fiat currency
• Crypto-to-crypto trading — Facilitating trades between different crypto assets
• Own-account trading — You can trade for your own account against client orders

A practical example: A crypto exchange accepting EUR deposits, allowing clients to buy and sell Bitcoin, Ethereum, and other assets on its platform, and generating revenue from the spread. That’s Class 2.

Another example: An OTC (over-the-counter) trading desk that quotes prices to institutional clients and executes large block trades as principal. Class 2.

The higher capital requirement reflects the operational and financial risk: you must have enough capital to absorb potential losses from market moves, client defaults, or operational disruptions. Regulators want to ensure you can always settle trades and return client fiat deposits.

Class 2 is the most common authorization level for crypto exchanges and trading platforms across the EU.

Class 3: Custody & Full-Service Platforms (€150,000)

Class 3 is the most comprehensive authorization level. It includes everything in Classes 1 and 2, plus custody and administration of crypto assets on behalf of clients.

Custody is the most capital-intensive service because you take possession and control of client crypto and fiat. You must safeguard assets worth potentially billions, comply with segregation rules, maintain redundant cold storage infrastructure, and manage the insurance and technical complexity that comes with holding other people’s money.

The business model of Class 3: This is the full-service platform model. Clients deposit crypto and fiat with you. They can trade on your platform (you’re the counterparty, like Class 2). You hold their assets in custody until they withdraw. You may also offer marketplace features where users post buy/sell offers and you charge a commission from both sides. Think of a platform like a crypto marketplace: clients fund accounts, trade, and their assets sit with you.

The €150,000 capital minimum is the highest because custody introduces the greatest regulatory and operational risk. You are responsible for the security and recovery of client assets. Regulators require this capital cushion to ensure you can absorb losses and continue operations even if your custody infrastructure is compromised or if you face an operational crisis.

Class 3 includes:

• Everything in Classes 1 and 2
• Custody — Safeguarding crypto and fiat assets on behalf of clients
• Administration — Managing wallets, accounts, and asset records for clients
• Full marketplace operation — Allowing users to post buy/sell offers, trade with each other, and you hold assets during settlement

A practical example: A crypto exchange where users deposit their crypto and fiat, trade with each other or with the exchange, and the exchange holds all assets in custody. Class 3.

Another example: A crypto fund manager that accepts client deposits, invests in various crypto assets, holds those assets in cold storage, and redeems client positions. Class 3.

Comparison Table & Decision Guide

This expanded table shows all permitted services and helps you identify your class:

Service	Class 1	Class 2	Class 3
Reception and transmission of orders	Yes	Yes	Yes
Investment advice	Yes	Yes	Yes
Execution of orders on behalf of clients	Yes	Yes	Yes
Placing orders with counterparties	Yes	Yes	Yes
Operating a crypto trading platform	No	Yes	Yes
Fiat-to-crypto trading	No	Yes	Yes
Crypto-to-crypto trading	No	Yes	Yes
Trading for own account	No	Yes	Yes
Custody of crypto assets	No	No	Yes
Custody of fiat assets	No	No	Yes
Administration of client assets	No	No	Yes
Minimum Capital	€50,000	€125,000	€150,000

How to choose your class:

The rule is simple: your CASP class is determined by the most capital-intensive service you offer. If you offer any Class 3 service, you need Class 3 authorization. If you offer Class 2 services but not Class 3, you need Class 2.

Ask yourself these questions in order:

1. Will you hold custody of client crypto or fiat at any point? → Class 3
2. Will you operate a trading platform or trade as principal against clients? → Class 2
3. Will you only give advice, route orders, and execute on behalf of clients without holding funds? → Class 1

Once you’ve identified your minimum class, consider whether you may expand your business later. Upgrading from Class 1 to Class 2 is possible via additional authorization, but it’s administratively simpler to start at the level you’ll need within 12–24 months.

EU Passporting: One License, All 27 Countries

This is one of MiCA’s most powerful features. Once you receive CASP authorization in any EU member state, you can passport your license to all 27 EU countries. No additional applications. No per-country licenses.

You passport by notifying the competent authority in each country where you plan to operate. You must appoint a local representative in each country, but you operate under a single CASP authorization. This dramatically reduces regulatory friction compared to the pre-MiCA era, when you needed separate licenses in each jurisdiction.

Polish context: Poland is currently blocked from issuing new CASP licenses due to a presidential veto on crypto framework legislation. However, if you hold a VASP license in Poland (the old system), you benefit from grandfathering. You can continue operating as a VASP until 1 July 2026 or until your CASP application is decided. During this period, you also have EU-wide passporting rights under the old framework.

If you obtain CASP authorization in another EU member state — Lithuania, Netherlands, Slovakia, Malta, France, or Cyprus — you can immediately passport into Poland and operate legally. We manage virtual IBAN infrastructure for VASPs and CASPs, ensuring seamless client payments across the EU.

Choosing Your Jurisdiction

MiCA is harmonized, but member states implement it differently. Capital requirements are fixed (€50k, €125k, €150k), but the cost, speed, and quality of getting licensed varies significantly.

Key factors when choosing a jurisdiction:

• Speed: How quickly does the regulator process CASP applications? Lithuania and Slovakia typically approve within 2–3 months. Cyprus can take 4–6 months.
• Cost: Professional fees for applications, legal support, and compliance setup vary by jurisdiction and complexity. Contact us for guidance.
• Regulatory culture: Some countries are crypto-friendly and pro-innovation (Lithuania, Malta). Others are cautious and prescriptive.
• Language: Do you need English-language support and documentation? Most jurisdictions provide it.
• Local office requirement: Some countries require a physical office or at least a registered agent. We provide virtual office and registered address services.
• Existing VASP availability: If you’re in Poland, the VASP M&A route (see below) may be faster and cheaper than starting fresh with CASP.

Strong jurisdictions for CASP:

• Lithuania — Fast, crypto-friendly, strong fintech ecosystem
• Netherlands — Established, English-friendly, reputable
• Slovakia — Affordable, growing fintech hub
• Malta — Experienced regulators, financial services infrastructure
• France — Rigorous but fair, large market
• Cyprus — Financial services hub, passporting to EU and beyond

Poland specifics: Poland’s CASP pathway remains blocked. However, if you’re already operating as a VASP (or interested in acquiring an existing VASP business), you have a bridge to full MiCA compliance via the grandfathering window until July 2026. We advise Polish crypto businesses to either acquire an existing VASP or apply for CASP in a friendly jurisdiction and passport back into Poland.

See our detailed guides: Crypto License in Poland & EU for overall strategy, MiCA CASP License in Poland for Poland-specific updates, and Buy or Sell Licensed VASPs if you’re considering the M&A route.

Frequently Asked Questions

Q: How do I know which CASP class I need?

A: Identify the most capital-intensive service you plan to offer. If you’ll hold custody, you need Class 3. If you’ll run a trading platform (but not custody), Class 2. If you’ll only give advice and route orders, Class 1.

Q: Can I start with Class 1 and upgrade to Class 2 later?

A: Yes. You can apply for additional authorization to move from Class 1 to Class 2. However, there’s regulatory and administrative overhead. It’s often simpler to start at the level you’ll need within 12–24 months.

Q: Is €50,000 the total cost to get licensed?

A: No. €50,000, €125,000, and €150,000 are regulatory minimum capital requirements. Professional fees for legal, compliance, and application support are separate. You must raise both the capital and cover professional fees. Contact us for a realistic estimate based on your situation and jurisdiction.

Q: Does my CASP class affect passporting rights?

A: No. All three classes have equal passporting rights across the EU. A Class 1 firm can passport to all 27 member states just as a Class 3 firm can.

Q: What if my business could fit multiple classes?

A: You apply for the highest class you need. You don’t need multiple licenses. If you might later move into custody, apply for Class 3 upfront.

Q: Are decentralized finance (DeFi) protocols covered by MiCA?

A: MiCA applies to centralized crypto service providers. DeFi protocols themselves are not regulated as CASPs, but if you operate a centralized platform that wraps DeFi services (e.g., a CEX that lets users access DeFi contracts), you’ll likely need CASP authorization.

Get Started

If you’re building a crypto business and need to understand your regulatory obligations under MiCA, we’re here to guide you. We advise on CASP class selection, jurisdiction strategy, and execution.

We also specialize in VASP-to-CASP transitions and VASP acquisitions for businesses already in the market.

Contact us:

• WhatsApp: Chat on WhatsApp
• Telegram: Message on Telegram
• Signal: Contact via Signal
• Email: info@zalewskiconsulting.pl
• Phone: +48 222 90 10 90

Whether you’re in Poland (where we advise on the grandfathering window and EU passporting strategy) or anywhere else in the EU, let’s discuss your path to licensed operation.