How to prepare to make
the transition to MiCA easier

A practical guide to the actors
of the crypto indusry

In the last few months, since it came into force, the Markets in Crypto-Assets Regulation (MiCA) has been a major topic of discussion in the European crypto industry. This regulation, which affects almost every crypto-asset on the market, has received many divergent opinions. The aim of the regulation is to provide a uniform approach and action plan by creating a quasi-rulebook that can be used as a guiding light for the authorities of the European Union, the Member States, and the market participants themselves. When it comes to the text itself, some love it, some hate it, but all agree that compliance is not something that can be realistically avoided. We would like to offer you some guidance with our new article, which aims to show you how to prepare to make the transition to MiCA easier.

Am I falling under the Umbrella of MiCA? 

First and foremost, the most important thing is to decide whether you and your business fall under the umbrella of MiCA. The Regulation deals with issuers and offerors of crypto assets, categorized by the type of token they handle. Those tokens can be e-money tokens, asset-referenced tokens, and other asset-based tokens that do not qualify as the first two groups. Due to this assortment, different obligations for operation and rules for the permission of authorization have been established.  

When it comes to service providers, MiCA have established 10 activities that are ruled as crypto-asset services. If your business provides one or more of the following: 

  • Providing custody and administration of crypto-assets on behalf of clients
  • Operating a trading platform for crypto-assets
  • Exchanging crypto-assets for funds
  • Exchanging crypto-assets for other crypto-assets
  • Executing orders for crypto-assets on behalf of clients
  • Placing of crypto-assets
  • Receiving and transmitting orders for crypto-assets on behalf of clients
  • Providing advice on crypto-assets
  • Providing portfolio management on crypto-assets
  • Providing transfer services for crypto-assets on behalf of clients

Then you should be aware that MiCA is applicable to you too. 

For a detailed description, please check out our previous articles, which cover, among other topics, the participants affected by the Regulation: Article 1 and Article 2.

Let us look at a few points that can help make the transition to MiCA much easier:

First and foremost, the most important step is to prepare a gap analysis evaluating where you are on the scale of total compliance with the Regulation. This is crucial whether you are just starting out or you have an operating business that has earned authorization in the related host Member State. To see your chances realistically, you must assess your current status and then the new obligations and requirements the legislation mandates of the market participants. Do not worry; we have already made some arrangements for this, so keep an eye out for our series about MiCA. In one of our next issues, we will present the various obligations crypto-asset service providers (CASPs) must handle to achieve compliance!   With this MiCA due diligence, you will be able to see effectively what still needs to be organized, fixed, or scheduled before the implementation periods end. Luckily, the Regulation has taken into account the time this task requires and made an exception: all the documents that are already available to the Competent Authority and are content-wise up to date do not have to be resubmitted.

When it comes to any transition — legal, financial, or even marketing-related — the most important factor is to have a good strategy in place. To have adequate preparations and avoid possible difficulties during the implementation period, you should create a thorough transition plan. Make sure to consider what information you should provide to your clients, and it is also useful to open an early dialogue with your national Competent Authority so the transition can go as smoothly as possible. Keep in mind that MiCA is a complementary regulation, and make sure to clarify whether some of your products and services fall under other regulatory frameworks. It is also necessary to note that entities providing crypto-asset services that are active in more than one Member State under local laws must comply with all applicable local laws until the end of the transitional period.

The Regulation has been developed bearing in mind that, in reliance on this market, there is already an existing sphere of practice to take into account. Based on this, we can sort the elements into two categories:

  1. Elements that are already compliant because they meet the specifications.
  2. Elements that are new specifications and need to be prepared.

The first category includes elements needed for compliance that are already in a state corresponding to the requirements set by MiCA. This could include, for example, a well-written White Paper, a clean connection system, and/or clarified transaction lists. Of course, this depends on your business as well, as an offeror, issuer, and crypto-asset service provider will have different documentation that they are required to submit.

The second category contains papers and documents that need to be prepared or updated to reach compliance. Many could be mentioned, but one aspect that MiCA strongly emphasizes is communicating information and notifying clients so they have a clear idea about what they are getting into. If you do not have a precise and detailed information relay system in place, you will most likely need to implement one before the implementation period ends.

Communication is important for a business in any part of its operation, whether internal or external. But when it comes to a transition, if possible, it is perhaps even more important.

4.1. Communication with the competent authority of the Home Member State 

Based on the Member State the business resides in, MiCA calls for an authority to be designated for this purpose in accordance with the rules in the Regulation. The competent authority will play a significant role in authorization, supervision, and operational support when it comes to compliance with the requirements. You, as a business owner, can start communicating your current status and plans to the authority, which – for example, in Sweden – is the FI (Finansinspektionen). By initiating and maintaining a conversation about your plans in relation to the transition to the new legal environment, you may unlock many advantages.

By notifying the Competent Authority about your current status, you can provide insight into the market, helping the authority with its assessment, which is a necessary step in preparing for the change. This also benefits you, because if the authority understands the real-life environment, it can make better decisions. A great example is the Swedish FI, as this authority is very active and open to communication and consultation with market participants.

Additionally, MiCA has granted Member States the option to decide whether they want to opt-in or opt-out of the grandfathering clause, which the regulation offers as an option. If the Member State opts in, then the grandfathering clause allows already authorized entities to continue their activities up until as late as June 2026. This means, in practice, that entities can keep operating as they have been under the Member States’ ‘pre-MiCA’ rules. Thanks to the grandfathering clause, achieving total compliance with the regulation can be postponed until this clause expires. But this is only applicable if the host Member State opts in – Member States have until June 30, 2024, to decide – so keep an eye out for the competent authority to know how your home Member State has decided regarding this option.

As some have already decided about opting-in or opting-out, the following list contains a few of them: 





The date MiCA becomes applicable 

(full transitional period) 

(with a shortened transition al period) 

(no transitional period) 





December 2025 





July 2026 





December 2025 





December 2024 





December 2025 




x (two-day transitional period) 

January 2025 


4.2. Communication with clients 

Communication is key, not just with the Competent Authority, but with customers and clients as well. MiCA has a direct effect on issuers, offerors, and crypto-asset service providers, but it indirectly affects clients and customers too. A new legal environment can cause uncertainty and discomfort in clients, which could result in them making unwise decisions based on misconceptions or fear. This can be easily avoided by clear-cut communication from the business, ensuring that the times ahead become clearer.

 By communicating:  

  • Your plans for the transitional period as soon as possible, including areas where you are already compliant with MiCA or which you have updated earlier. This way, customers can rest assured that they are in good hands and can assess the situation and progress with more certainty.
  • The classification of your business: if you are an issuer or offeror, specify the tokens you deal with and whether they qualify as one of the three tokens designated by the regulation. As a crypto-asset service provider, clarify which crypto-asset services you provide under MiCA.
  • Regarding the grandfathering clause: if the home Member State opted in, explain what it means for your customers and whether you plan to take advantage of it or start the authorization process sooner.
  • About the Member State you provide your services from: provide information about the home Member State’s approach to MiCA and highlight the differences from the current legislation. Make sure to include the type of authorization you currently hold and mention the authorization the business will most likely hold in the future.

Important note! If other sectoral regulations apply to your business, make sure to clarify the regulatory status of services and/or products to avoid any confusion.

It would be advisable to start communicating as soon as possible and inform your customers about any new developments or news relevant to them.

The ‘better sooner rather than later’ idiom is truer than ever when it comes to aligning with compliance. It is important to bear in mind that such a transition — depending on your existing practices and your readiness as it stands now — usually takes up to 3-6 months to prepare internally before you can submit your application. It might even take longer for the national Competent Authority to process it. It is safe to say that you should make your business plans and strategies considering approximately a year for the full transition of your business. 

Under MiCA, when we take the case of crypto-asset service providers applying for authorization, the Competent Authority will have 25 working days from receipt of an application to assess its completeness. If the application is deemed complete, the authority will notify the CASP. Within 40 working days from the date of receipt of a complete application, they will assess whether authorization can be granted or refused. The authority must inform the CASP of the decision within five working days. So, even without counting any errors or deficiencies the application might have — which would hinder the process — roughly 70 days, or about 2.5 months, pass before authorization is granted. It shows how important it is to take the first steps as early as possible. 

A good way for you to accelerate things in the transitional period is to start arrangements to prepare your present operational practice to comply with the Regulation. Under MiCA, many requirements and obligations have been formulated based on the token or service one provides, and compliance with many of those can already be started now. Beyond those parts of the Regulation that require further clarification from the authorities, there are several that are more or less clear by now. Therefore, your internal transition can happen parallel to the conversations still ongoing on the European level regarding MiCA. Taking steps one by one, you can make assessments that will help your practice get closer and closer to compliance. 

For this, we suggest that based on your transition plan relying on your gap analysis, you should find the elements in your current setup that can already be rearranged. For example, if MiCA obliges the type of service you provide to have an advanced communication system in place, you can start building it now, either just in theory or by taking the first steps. 

Although because of the grandfathering clause, authorization might become necessary at a later stage — depending on the home Member State’s decision — starting the application as soon as possible is highly advisable, especially considering the time necessary for the authority to process it and grant you the license. As several documents might be required for the acquisition of the license, it is highly recommended to start gathering these or apply for their preparation.

We also cannot rule out the possibility that a Member State may not opt in for the grandfathering clause—in which case, the application of the Regulation in December 2024 will take effect. For this reason, also, the sooner you get your company ready for authorization, the better, and you also save yourself some unwanted headaches.

Another good way for you to spend the transitional period and start the preparations is to take part in the consultations held by ESMA and EBA. As mandated by MiCA, these two bodies have to consult with market participants about the Regulatory Technical Standards (RTS), Implementing Technical Standards (ITS), and Guidelines they develop.

The feedback is advantageous for both the authorities and for you. By providing your comments, you can have an effect on the final drafts and also have a say in the provisions they establish, and the authorities will see the market’s opinion.

EBA has decided—in order to create more viable and practical recommendations—to engage in public hearings regarding the consultations, where market participants have the opportunity to talk to the very people who create these papers, and state their questions and opinions virtually or sometimes face-to-face. Most of these have passed, but we can assess the situation by them a little.

Although most hearings had a steady 30-50 attendees—sometimes close to 100—a few of them seemed to be more popular than others, making the live debates vary in degree of intensity. In some public hearings, the feedback was scarce, while in others, the discussions even exceeded the allotted time. In most cases, CASPs (crypto-asset service providers) were more likely to ask operational and practical questions; on the other hand, issuers and offerors weren’t as active. This can still change, as by writing the answers to the consultations, you can still shape the topics that will be later thoroughly discussed and finalized.

The time until December 2024 or June 2026 may still seem long, starting the transitional steps is highly recommended. Follow us to get more information regarding this Regulation and decode MiCA together!

The next article will cover the requirements for CASPs on passporting rules, and it is already in the making, so make sure to check back soon for more industry news and articles!

If you have any questions regarding MiCA or would like us to dissect a specific part relevant to your business, feel free to contact us at and follow our #micaseries for clarifications and industry insights.

Exciting developments
are underway at Kassailaw!
Our team of legal and technology experts is hard at work, preparing to launch a new and innovative way to access information and knowledge. This interactive platform will provide an immersive and engaging experience and we’re eager to share it with you.
Stay tuned!

“Is your team the dream team? How much percentage should each founder get?” One of the core ingredients to success is the right team with complementing skills and personalities: early stage investors (and business partners too, by the way) will invest in the team, not the idea. Our goal is to guide you in building a strong and well-functioning team, as well as help you uncover potential friction points or weaknesses in the team, so that you can address them in the very beginning. When it comes to the fair split with your co-founders, if you need a reference point, or just want reassurance, we have developed our own tool for equity split calculation. Hint: the one answer that’s certainly wrong is a hasty 50-50 split.

You have spotted a problem and found a viable solution – in other words, you have your idea. What’s the next step? You need to make sure that the problem your business is trying to solve is a valid problem for a wide enough group, and that

Are you sure that the problem your business is trying to solve is a valid problem for a wide enough group? 

When you spot a problem and think you have found a viable solution to create a business around, it’s all too easy to get excited and jump straight into ideating a solution.

Avoid making something and then hoping people buy it when you could research what people need and then make that.

It doesn’t make any sense to make a key and then run around looking for a lock to open.

There are many ingredients in the recipe for creating a successful startup, but most certainly whatever you read and wherever you go, one of the first pieces of advice is going to be to do your homework properly regarding the validation. You have to validate both your problem and your solution to be able to define the perfect problem-solution and later on the product-market fit. If you manipulate your future customers into liking your solution or do not reveal all the aspects and layers of a problem you identified, your idea can easily lose its ground and with that the probability of it surviving and actually being turned into a prosperous business. Let us know if we can help at this initial but yet super-important stage.

Validation is the first step in moving towards learning more about the problem you are ultimately looking to solve.

Finding your unique value proposition is only possible if you take a thorough glance at your competitors. The world of tech is highly competitive, particularly so when you operate in a field with low entry barriers, you need to carefully examine and regularly update the news and developments of those companies who act in the same field and market. This might lead to several pivots for you if necessary, because you can significantly increase your chances of success if you can offer a—at least in some aspect—unique solution to your customers. The introduction as “we are like Uber/Snapchat/WeWork/Spotify, only better” is hardly sufficient in most cases. Unless you really are so much better, but then you need to know that too, so up the competitive analysis.