HOW TO MAINTAIN CASP LICENSE COMPLIANCE: A COMPLETE GUIDE

How to Maintain CASP License Compliance: A Complete Guide

How to Maintain CASP License Compliance: A Complete Guide

Blog Article

Securing a CASP (copyright-Asset Service Provider) license under the European Union’s MiCA regulation is only the first step. The real challenge begins after approval—when your copyright business must maintain full compliance with ongoing regulatory requirements.


Failure to meet these obligations can result in hefty fines, suspension, or even revocation of your CASP license. In this article, we’ll walk through the key strategies and components required to maintain CASP license compliance effectively and consistently.




1. Implement Robust AML/CFT Programs


Anti-Money Laundering (AML) and Counter-Terrorist Financing (CFT) obligations are core to CASP compliance. Once licensed, your business must continuously monitor transactions, perform customer due diligence (CDD), and report suspicious activities to relevant authorities.


Ongoing AML obligations include:





  • KYC Updates: Regularly refresh customer identification documents, especially for high-risk clients.




  • Transaction Monitoring: Deploy automated systems to detect anomalies in transaction size, frequency, and counterparties.




  • SAR Reporting: File Suspicious Activity Reports when red flags appear.




  • Training: Conduct regular AML/CFT training sessions for staff.




Regulators expect a dynamic, risk-based AML approach—not static, one-time procedures.



2. Maintain Strong Corporate Governance


MiCA requires CASPs to demonstrate sound and transparent internal governance practices. This includes having clear reporting lines, internal controls, and role separation to avoid conflicts of interest.


To maintain compliance:





  • Keep your Board of Directors and executives updated on compliance developments.




  • Ensure regular internal audits of all copyright operations.




  • Maintain a compliance function independent from your business operations.




Any major changes to management or ownership must be reported to the regulatory authority.



3. Update and Review Internal Policies Regularly


Your internal policies—such as those related to risk management, data protection, and IT security—should not remain static.


You must:





  • Review policies quarterly or bi-annually




  • Update procedures when there are regulatory updates or market shifts




  • Document all changes to ensure audit trail clarity




  • Distribute updated policies to relevant staff and train them accordingly




This is particularly important in fast-moving sectors like copyright where risks and technology evolve rapidly.



4. Ensure IT and Cybersecurity Controls Are Up to Date


CASPs deal with sensitive client data and digital assets—making cybersecurity a top priority for regulators.


To maintain IT compliance:





  • Implement multi-factor authentication (MFA) for all access points




  • Regularly run penetration testing and vulnerability assessments




  • Maintain backups of critical data and infrastructure




  • Respond swiftly to any data breach or attempted cyberattack, and report incidents as per local requirements




Cybersecurity breaches can lead to regulatory penalties and client loss of trust—both fatal for copyright businesses.



5. Submit Periodic Regulatory Reports


CASP license holders are required to submit reports and disclosures to the financial regulator in their licensed jurisdiction.


Typical reporting obligations include:





  • Financial statements (audited annually)




  • Transaction volume data




  • AML reports (including suspicious transaction logs)




  • Client asset custody status




  • Notifications of significant changes (staffing, structure, services)




Timely and accurate reporting is not optional—it demonstrates transparency and operational health.



6. Maintain Required Capital Reserves


MiCA sets minimum capital requirements for CASPs depending on the type of services provided—ranging from €50,000 to €150,000.


Ongoing compliance means:





  • Keeping these funds in an accessible EU-based account




  • Not letting operational losses reduce capital below the threshold




  • Reporting your capital position in periodic filings




Regulators may demand additional capital buffers depending on your risk exposure.



7. Ensure Data Protection and GDPR Compliance


Your business must align not only with MiCA, but also with the EU's General Data Protection Regulation (GDPR).


To stay compliant:





  • Use privacy-by-design in all your systems




  • Gain explicit consent from users before collecting or processing their personal data




  • Ensure data is stored securely, preferably within the EU




  • Honor data subject rights such as the right to erasure, portability, and access




Violating GDPR can result in fines up to €20 million—or 4% of your annual global turnover.



8. Monitor Service Expansion and Cross-Border Operations


MiCA allows passporting across the EU. However, if you expand your services, you may need to notify regulators or update your license.


Examples include:





  • Launching new copyright-asset types




  • Offering staking or lending services




  • Changing your business model or platform technology




Always consult your local regulator before introducing new offerings, to ensure they fall within your existing CASP license scope.



9. Train Staff Continuously


Regulatory compliance is a company-wide effort. That’s why ongoing training is essential, especially in areas like:





  • AML procedures




  • Risk management




  • Data handling




  • Compliance protocols




Ensure that your staff knows how to respond to compliance triggers and whom to contact when incidents occur.


Keep training logs and performance assessments for regulators during audits.



10. Prepare for Audits and On-Site Inspections


Regulators have the right to conduct scheduled and unscheduled inspections of licensed CASPs. Preparation is key.


Best practices:





  • Maintain organized and accessible records




  • Conduct internal audits ahead of regulatory visits




  • Designate a compliance officer as the inspection point of contact




  • Keep evidence of adherence to all policies and obligations




Being transparent and cooperative during inspections builds trust and minimizes penalties.




Final Thoughts


The CASP license is not a one-time achievement—it’s a continuous commitment to operational excellence, transparency, and regulatory cooperation. Businesses that treat compliance as an ongoing strategic priority are the ones that grow, scale, and lead in the European copyright market.


Whether you're a startup or an established copyright platform, maintaining CASP license compliance is the foundation for long-term success. Build strong systems today, and you'll reap the rewards tomorrow.

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