Behind Licentium
Our Edge
Licentium is a specialized platform that connects crypto-asset issuers and service providers with an international network of lawyers, regulatory consultants, and former supervisors. Projects can map applicable rules in key jurisdictions through a single interface, obtain jurisdiction-specific launch advice, arrange the drafting of white papers and licensing applications, and schedule ongoing compliance health-checks. The platform’s curated expert pool spans financial services, data protection, and corporate law, enabling founders to address cross-border requirements—from MiCA in the EU to securities, AML, and consumer-protection regimes elsewhere—within coherent project timelines and budgets.
One EU perimeter for crypto
MiCAR creates a single rulebook for anyone who issues, offers, lists, or provides services for crypto-assets inside the European Union. The Regulation applies to all natural or legal persons carrying out those activities in the EU, whether startups, established exchanges, or other intermediaries.
What's in scope
If your project does any of the following within the Union, MiCAR is relevant:
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launching or selling a token to the public;
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asking for that token to trade on an EU platform;
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running any of the ten regulated crypto-asset services (custody, exchange, brokerage, trading platform, advice, portfolio management, transfers, order handling, or token placement).
Clear carve-outs
You are out of scope if your activity falls into one of these buckets:
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purely intra-group services (parent ↔ subsidiary) or work done by insolvency liquidators;
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central banks, the European Investment Bank, and other public international bodies acting in an official capacity;
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genuinely unique, non-fungible tokens (one-off NFTs) and digital items that cannot be transferred between users;
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instruments already governed by other EU law (MiFID securities, deposits, funds, insurance or pensions).
How MiCAR classifies tokens
To keep requirements proportionate, the Regulation splits the universe of crypto-assets into three technology-neutral categories:
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E-money tokens (EMTs) – tokens that aim to track one official currency.
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Asset-referenced tokens (ARTs) – tokens that aim to stay stable by referencing anything else (multiple currencies, commodities, a basket of assets, etc.).
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All other crypto-assets – everything from utility tokens that unlock a future service to governance or collectibles that do not promise stability.
Key terms founders should know
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Crypto-asset – any digital representation of value or rights that can be stored and transferred using distributed-ledger tech.
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Utility token – a crypto-asset whose sole purpose is to give access to a good or service from its issuer.
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Asset-referenced token – a crypto-asset (not an EMT) that promises price stability by tying itself to other assets or rights.
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E-money token – a crypto-asset that mirrors a single official currency, such as the euro.
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Offer to the public – any communication that gives would-be buyers enough information to decide whether to purchase a token.
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Crypto-asset service provider (CASP) – any business that professionally offers at least one of the ten regulated crypto services listed above.
Who must comply?
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Token issuers and offerors – If you put a non-stable token on sale to EU users (or ask for it to be listed), you must be incorporated, publish a plain-English white paper, and follow MiCAR's marketing and conduct rules.
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Stable-token issuers (ARTs & EMTs) – You face extra licensing, reserve-asset, and governance duties before launch and throughout the token's life.
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CASPs based in the EU – You need a single EU licence, minimum capital, and ongoing consumer-protection, prudential, and IT-security obligations.
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Firms outside the EU – You may serve EU clients only if those clients reach out entirely on their initiative; any active solicitation triggers the full licensing requirement.
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MiCAR frames a single, Union-wide rule-set for “plain” crypto-assets: the utility tokens and other coins that are not asset-referenced or e-money tokens. Think of this Title II regime as a light-touch prospectus code: founders can reach all EU investors once they publish a compliant white-paper and follow a handful of conduct and marketing safeguards.
Which tokens are in scope?
In: any crypto-asset offered to the public or admitted to trading in the EU that is not an ART or EMT.
Out:
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free distributions, mining rewards, or airdrops where nothing of value (including personal data) is exchanged;
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utility tokens already usable for a live product or sold for use inside a closed “limited network” of merchants (but a notice is required once sales break €1 m in 12 months);
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micro or private offers: ≤150 persons per Member State, or total proceeds ≤ €1 m over 12 months, or sales only to qualified investors
These carve-outs disappear if you announce an intention to list the token on an EU trading platform.
The white-paper
Before marketing or sale, the offeror (or the person seeking a listing) must be a legal entity and must draft, notify, and publish a “crypto-asset white paper”. Key points founders need to hit:
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Minimum contents – project, team, token, technology, risks, ESG footprint of the consensus mechanism, rights attached to the token, offer terms, refund mechanics, etc. (Annex I gives the full checklist)
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Plain warnings on page 1: the token can lose value, may be illiquid or non-transferable, is not covered by EU deposit- or investor-protection schemes, and (for utility tokens) might never be exchangeable for the promised product;
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Style – information must be fair, clear, not misleading, and free of forward-looking price claims;
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Liability – the management body signs off that the document is accurate; civil liability rests with the offeror if the paper is wrong or incomplete (no contractual carve-outs are allowed)
Fast-track notification, EU passport
The white-paper (and any marketing material, on request) is not pre-approved by regulators, but must be notified to the home-state authority 20 working days before publication, together with a list of Member States where you plan to sell or list. The home authority forwards it to host countries and to ESMA; once published on your website, it can circulate across the EU without further filings.
If facts change, publish an updated, time-stamped version and keep all past versions online for 10 years.
Marketing rules
Promos, blog posts, X threads, and Discord announcements must:
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be consistent with the white-paper,
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link clearly to the paper, and
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carry a banner disclaimer that “this marketing communication has not been reviewed or approved by any EU authority”.
No marketing may be released until the white-paper is live.
Safeguarding the raise
While the offer is open (or, for open-ended sales, until the 14-day withdrawal window closes) founders must park the fiat or crypto they collect with either a credit institution or a licensed custodian CASP.
Retail protection – the 14-day “cooling-off” right
Anyone who buys directly from the project (or their placing agent) can walk away within 14 calendar days, penalty-free, and must be reimbursed in the same payment form within another 14 days. The right is lost once the token is trading or, for time-boxed sales, after the subscription period ends.
Conduct standards during and after the sale
Offerors and listing applicants must:
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act honestly, fairly, and professionally,
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keep comms fair, clear, and not misleading,
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manage and disclose conflicts, and
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maintain IT/security to forthcoming EU standards.
They must also publish the final sale result within 20 working days, or – for perpetual sales – circulate figures at least monthly.
Time cap for “pre-product” utility tokens
If you sell a utility token that gives access to a product or service not yet live, the public offer must finish within 12 months of launch; updating the white-paper later does not let you extend the deadline.
Enforcement backdrop
Regulators can demand corrections, suspend the sale or listing, and publish warnings where papers or promos are misleading. Because no prior approval is needed, keeping the white-paper accurate – and updating it fast – is squarely on the founder.
What this means for founders
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Build a concise, Annex I-compliant white-paper first; your marketing and Discord hype must follow it, not lead it.
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Budget at least 20 working days for regulator notification, even though no formal approval is needed.
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Put custody arrangements in place for subscriber funds from day one.
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Roll out a refund flow to honour the 14-day withdrawal right.
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Keep versions, metrics, and disclosures on your site for as long as tokens circulate.
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ARTs are crypto-assets that promise price-stability by pegging their value to more than one asset (for example, a basket of several currencies, commodities, or other crypto-assets). Because they can grow quickly into quasi-payment instruments, MiCAR puts them under a dedicated, banking-style regime.
Licence gate-keeper
Who must apply? Any EU-established legal entity that plans to offer ARTs to the public or list them on a trading venue must secure an authorisation from its home supervisor before the first token is sold. Credit institutions can skip the licence, but must still lodge their white paper for approval.Application pack. Expect to file a business plan, governance map, legal opinion confirming the token is not e-money, draft white paper, and details of service-provider agreements.
Result. Once cleared, your firm’s name and the token data are entered in ESMA’s public register; authorisation can be pulled if the token threatens payments or monetary policy, or if you breach ongoing duties.
Own-funds safety net
Issuers must keep the higher of:
- €350 000,
- 2 % of the average reserve size, or
- a quarter of last year’s fixed overheads – held in CET1-quality capital. Supervisors may push this up by 20–40 % after stress-tests, and the ratio rises to 3 % for “significant” ARTs (see §7).
The reserve: how the peg is kept
- Full, segregated, and bankruptcy-remote. A matching reserve must be maintained at all times and ring-fenced from the issuer’s own assets.
- Asset quality & liquidity. Reserve assets have to be highly liquid, low-risk, and diversified; daily and weekly liquidity buckets and currency-by-currency floors will be set in RTS.- Custody rules. Assets must be held with EU-regulated credit institutions, investment firms, or authorised custodial CASPs under strict segregation; custodians are liable for loss.
- Ongoing assurance. Management must ensure every issue/redemption is mirrored in the reserve, commission an independent audit every six months, and publish key reserve metrics quarterly once the token exceeds €100 m in circulation.
Redemption promise
Holders enjoy an unconditional, anytime right to redeem either cash equal to the market value of the referenced assets or the assets themselves. You must publish clear procedures that still work under stress or during an orderly wind-down.
Governance & operational hygiene
Boards must run ART programmes with banking-grade ICT, risk and continuity controls, maintain detailed internal policies, and submit to regular external audits.
When volume caps kick in
If daily transactions inside a single currency area rise above 1 million or €200 m, supervisors can force you to cut usage – for example by imposing minimum denominations – until activity drops back below the threshold.
“Significant” ARTs – the extra layer
EBA (not the national supervisor) takes over whenever a token, or group of related tokens, breaches size or user thresholds. Extra duties include:
- a formal remuneration policy, ability for multiple independent custodians to hold the token, liquidity-management policy and regular stress-tests,
- a higher own-funds floor (3 % of the reserve).
Grounds for withdrawal
Authorisation is lost if you cease activity, obtain the licence by deceit, no longer meet the conditions, or pose a serious threat to financial stability, payments, or AML/CTF objectives.
Key takeaway for founders
An ART licence is closer to a lightweight banking charter than a simple token registration. Budget time and capital for the reserve, robust governance, permanent redemption, and the possibility of quickly scaling up to EBA supervision if your token takes off.
An EMT is a crypto-asset that promises to stay equal in value to one official fiat currency (euro, krona, zloty, etc.). MiCAR treats every EMT as electronic money, so each token is a direct claim on its issuer and must be minted only when matching funds have been received.
Who may issue — and the two-step filing calendar
- Permitted issuers: only EU-licensed credit institutions (banks) and electronic-money institutions (EMIs).
- 40-day intention notice: at least 40 working days before the planned launch or listing, the issuer must tell its home supervisor that it intends to offer or admit the token to trading.
- 20-day white-paper notice: the crypto-asset white paper (drawn up to Annex III’s template) must be filed 20 working days before it is published on the issuer’s website. Competent authorities cannot demand ex-ante approval.
Par-value minting and on-demand redemption
Tokens must be issued at par — €1 in, one €-pegged token out — and every holder can redeem at par, any time, free of fees. The redemption terms have to appear prominently in the white paper.
No yield, no tricks
To stop EMTs from morphing into savings products, the Regulation bans any interest or time-based reward paid by issuers or by CASPs that service the token. Loyalty bonuses or fee rebates that replicate a yield are also forbidden.
Safeguarding the backing funds
Cash collected for EMTs must be handled like this: ≥ 30 % sits in segregated accounts at EU credit institutions; the remaining ≤ 70 % may go only into highly-liquid, low-risk assets denominated in the same currency as the token, avoiding FX risk. Issuers must also prepare a recovery plan and an orderly-redemption plan within six months of launch so that holders can be paid even if the business fails.
Marketing guard-rails
All promos must be clearly identifiable, match the white paper, and state up front that holders can redeem at par at any time. No marketing may run until the white paper is published online.
“Significant” EMTs — scaling triggers and extra duties
If an EMT meets three or more systemic-risk thresholds (market cap, transaction volume, user base, etc.), the European Banking Authority re-labels it a significant EMT. Consequences: higher own-funds and liquidity ratios, formal liquidity-management and interoperability policies, six-monthly reserve audits, and direct EBA supervision (unless 80 % of activity stays in one non-euro Member State).
What founders should plan for
- Licence first: if you are not already a bank or EMI, expect 6-12 months to obtain an e-money licence before you code the token contract.
- Par-value discipline: build mint-and-burn logic that mirrors cash inflows and outflows instantly.
Treasury limits: your “float” must respect the 30 %/70 % split and stay in same-currency assets.
- No yield hooks: staking, cashback, or loyalty schemes that look like interest are off-limits.
- Scale readiness: keep dashboards for the systemic-risk metrics so you can pivot to the significant-EMT add-ons and EBA oversight, without delay.
- 24/7 redemption rails: design banking and custody flows that let any holder cash out on demand, even in stress scenarios.
Treat an EMT as digital cash, not an investment product. Do that, and MiCAR gives you a clear, passportable path to EU-wide circulation.
Any undertaking that intends to provide crypto-asset services to clients in the EU must first obtain CASP authorisation. The requirement applies regardless of legal form, but the applicant’s registered office and effective management must be inside the Union, with at least one director resident there. Using a “crypto-style” name or marketing that implies authorisation is forbidden until the permit has been granted. Banks, investment firms, e-money institutions, fund managers and central-securities depositories that are already regulated can instead lodge a short notification with their home supervisor before starting crypto activities; after that they are treated as CASPs for all other MiCAR purposes.
Authorisation file — key contents
The application goes to the competent authority in the Member State of establishment and must include:- a programme of operations describing every planned crypto service and the intended marketing approach;
- evidence that the prudential-capital test is met (see below);
- comprehensive governance information (qualifying shareholders, directors’ fitness and propriety, staffing plan, conflict-of-interest policy);
- risk-management, AML/CFT and business-continuity frameworks;
- plain-language documentation of ICT and security architecture;
- procedures for segregating client assets and funds;
- service-specific dossiers such as custody policy, trading-platform rules, execution policy and commercial policy.
Once the file is deemed complete, the supervisor has 40 working days to decide. After authorisation, services can be “passported” across the EU following a simple notification, and operations may start in another Member State 15 days later.
Capital and prudential safeguards
MiCAR sets two layers of prudential resources:- a fixed minimum (based on business model) and
- a variable minimum equal to 25 % of the previous year’s fixed overheads.
The higher figure must always be held, either as own funds or through an EU-wide insurance guarantee.
- Class 1 services — advisory, order handling, execution for clients, token placing, transfer services, portfolio management — €50 000 minimum.
- Class 2 services — any Class 1 activity plus custody or exchange (fiat-to-crypto or crypto-to-crypto) — €125 000 minimum.
- Class 3 services — operation of a trading platform (and any other services from Classes 2 or 1) — €150 000 minimum.
Conduct and organisational duties
- Operate honestly, fairly and professionally, warn clients about risks, and ensure all communications are clear and not misleading. Pricing, fees and the sustainability impact of the underlying consensus mechanism must be published on the firm’s website.- Maintain sound internal controls, robust ICT and records that allow investigators to reconstruct every order and transaction for at least five years.
- Ensure managers and significant shareholders are fit and proper, and that staff possess adequate knowledge and skills.
- Meet service-specific add-ons such as transparent fee grids for trading-platform operators, non-discriminatory commercial policies for proprietary exchanges, best-execution procedures for brokers, and conflict-of-interest controls for placings.
Outsourcing control
Responsibility for outsourced tasks remains with the CASP. Contracts must guarantee supervisory access, data-protection standards, practical exit strategies and the capacity to oversee providers at all times.
Orderly wind-down
CASPs that run custody, exchange, trading, execution or other critical services must maintain a documented plan showing how client interests and essential functions would be protected—or smoothly transferred—if operations cease.
Practical takeaway
A successful application demonstrates sufficient capital, credible governance, resilient technology and clear client protections. Once licensed, a CASP can scale across the entire EU with a single passport, and future service additions usually require only a notification, not a new authorisation.The market-abuse regime applies to any conduct—on-chain or off-chain, inside or outside the EU—that concerns crypto-assets already admitted to trading in the Union or for which admission is being sought.
Inside information & transparency duties
Inside information is any non-public, precise fact or event relating to a crypto-asset (or its issuer/offeror) that a reasonable holder would consider when making investment decisions. Orders pending execution that could move the price are also covered.
Public disclosure. Issuers, offerors and persons seeking admission must publish inside information as soon as possible in a way that ensures fast, complete and correct access, and keep it on their website for at least five years. Disclosure may be delayed only where (i) immediate publication would prejudice legitimate interests, (ii) delay would not mislead the public, and (iii) confidentiality can be safeguarded; the decision and its reasons must be reported to the competent authority once the information is released.
Prohibited conduct
Insider dealing. Using inside information to acquire, dispose of, cancel or amend orders, or recommending/inducing others to do so.
Unlawful disclosure. Passing inside information to others outside the normal exercise of employment, profession or duties; onward transmission of a tip based on inside information.
Market manipulation. Any behaviour that gives or is likely to give false or misleading signals on supply, demand or price, or sets prices at abnormal or artificial levels, or uses deception.
Surveillance & reporting obligations
Persons professionally arranging or executing crypto-asset transactions must implement effective systems, procedures and controls to prevent and detect market abuse. Immediate suspicious-transaction reports must be sent to the national competent authority; that authority must relay the information to the supervisors of the trading platforms involved.
Trading-platform operators have parallel duties: resilient systems able to reject erroneous orders, real-time publication of bid/ask data and trade prints, transparent fee structures, and continuous monitoring for abusive activity with mandatory notification to supervisors when abuse is detected.
Enforcement powers & sanctions
National authorities are equipped to:- Investigate (compel information, seize data, enter premises, question individuals, freeze assets, etc.).
- Intervene (suspend offers, halt trading, require publication of corrective statements).
- Penalise — sanctions include public warnings, disgorgement, activity bans and fines of: up to €1 m for natural persons for disclosure offences and €5 m for insider dealing or manipulation; up to €2.5 m and €15 m respectively—or up to 15 % of annual turnover—for legal persons;
- or three times the profits gained or losses avoided if higher.
Each Member State must appoint one or more authorities to police MiCA and name a single cross-border contact point; ESMA keeps the Union-wide list. Day-to-day supervision of issuers, offerors and crypto-asset service providers (CASPs) sits with those national authorities, but ESMA and EBA coordinate and may step in where Union-level consistency is at risk (e.g., ESMA can directly wield national powers against a recalcitrant CASP).
Once an asset-referenced token (ART) or e-money token (EMT) is labelled significant, primary oversight shifts to EBA; a college chaired by EBA—bringing in ESMA, the ECB, relevant national supervisors and other key authorities—ensures joint scrutiny and information-sharing.
Toolbox of supervisory powers
National authorities are equipped, at a minimum, to:- Demand information from any person and carry out on-site inspections.
- Freeze activity: suspend provision of a crypto-asset service, an offer, an admission to trading or trading itself for up to 30 working days where infringement is suspected.
- Impose outright prohibitions on services, offers or trading when a breach is confirmed or imminent.
- Order corrective disclosures—from amending a white paper or marketing campaign to forcing publication of any material information needed to protect holders or the market.
- Publicly name and shame non-compliant actors and require warnings on online interfaces; in extreme cases, demand content removal or geo-blocking to stop consumer harm.
- Act against unlicensed actors with immediate cease-and-desist orders and may oblige a failed CASP to transfer client contracts to another provider.
Penalty framework
Breaches of core conduct & prudential duties (Titles II–V):
- Natural person: ≥ €700 000- Legal person: ≥ €5 m or 3–12.5 % of global turnover (tiered)
- Alternative ceiling: ≥ 2× profit gained / loss avoided- Other measures: public statement, cease-and-desist, disgorgement, authorisation withdrawal, management bans up to 10 yrs.
Market-abuse violations (insider dealing, unlawful disclosure, manipulation)
- Natural person: ≥ €1 m (disclosure) / €5 m (insider & manipulation)
- Legal person: ≥ €2.5 m / €15 m or 2 % / 15 % of turnover
- Alternative ceiling: ≥ 3× profit
- Other measures: same ancillary powers plus trading bans for individuals.
The EU’s Markets in Crypto-Assets Regulation
The Markets in Crypto-Assets Regulation (MiCAR) is the EU’s first single rule-book for crypto. It sets uniform EU-wide requirements for (i) issuing or listing any crypto-asset, (ii) offering or redeeming asset-referenced tokens (ARTs) and e-money tokens (EMTs), and (iii) licensing and supervising crypto-asset service providers (CASPs) such as exchanges, brokers or custodians. By replacing today’s patchwork of national rules with one passportable licence, MiCAR aims to give startups legal certainty while protecting users and financial stability .
