Own funds requirement for entities authorized as Crypto Asset Service Provider (CASP), Electronic Money Institution (EMI) and Investment Firm (IF)

How should own funds requirements be determined for a legal entity authorised as a crypto-asset service provider (CASP) under Regulation (EU) 2023/1114 (MiCAR), as an electronic money institution (EMI) under Directive 2009/110/EC, and as an investment firm under Regulation (EU) 2019/2033 (IFR) and Directive (EU) 2019/2034 (IFD), in particular where certain crypto asset services – such as the transfer of crypto assets on behalf of clients – require a specific CASP authorization rather than a notification regime, and given the absence of explicit provisions governing the interaction between the two prudential frameworks?

Article 60 of Regulation (EU) 2023/1114 on Markets in Crypto-assets (“MiCA”) allows an investment firm (“IF”) to provide crypto-asset services that are equivalent to the investment services and activities for which it is already authorised, subject only to a notification to its competent authority. In such cases, MiCA provides that the relevant investment firms are exempt from the prudential, including capital, requirements laid down in the Regulation. By contrast, Article 62 MiCA, concerning the application for authorisation as a crypto-asset service provider (“CASP”), requires an application for authorisation where an entity seeks to provide transfer of crypto-assets and execution of orders on behalf of clients. In this case, MiCA provides that the Regulation applies in full, including the prudential and capital requirements set out in Article 67. Against this background, clarification is sought as to the applicable capital requirements for an investment firm that is also authorised as a CASP due to the provision of transfer and execution services on behalf of clients. More generally, this specific case also raises the question of how capital requirements coming from different licenses (IF, CASP, EMI) should be combined, in the absence of explicit rules within the regulations.