Article 59 Authorisation

Summary What does Article 59 of the MiCA regulation say?

This is a foundational gateway article establishing who is permitted to provide crypto-asset services within the Union.

It sets out two routes to lawful operation: either obtain a dedicated authorisation as a crypto-asset service provider under Article 63, or qualify as an already-regulated financial entity (such as a credit institution, investment firm, or electronic money institution) permitted to provide crypto-asset services under Article 60.

Beyond establishing these entry conditions, the article also sets out ongoing obligations around establishment, authorisation maintenance, and the prohibition on unauthorised entities holding themselves out as crypto-asset service providers.

Important points:

Do not provide crypto-asset services in the Union without either a dedicated authorisation under Article 63 or eligibility as a regulated financial entity under Article 60.
Authorised crypto-asset service providers must maintain a registered office and effective management in the Union, with at least one director resident in the Union.
Once authorised, the right to operate extends across the entire Union without requiring a physical presence in each host Member State.

Springlex's summary of the article, a reading aid, not a substitute for the legal text.

1. A person shall not provide crypto-asset services, within the Union, unless that person is:
  1. a legal person or other undertaking that has been authorised as crypto-asset service provider in accordance with Article 63; or
  2. a credit institution, central securities depository, investment firm, market operator, electronic money institution, UCITS management company, or an alternative investment fund manager that is allowed to provide crypto-asset services pursuant to Article 60.
1. Crypto-asset service providers authorised in accordance with Article 63 shall have a registered office in a Member State where they carry out at least part of their crypto-asset services. They shall have their place of effective management in the Union and at least one of the directors shall be resident in the Union.
1. For the purposes of paragraph 1, point (a), other undertakings that are not legal persons shall only provide crypto-asset services if their legal form ensures a level of protection for third parties’ interests equivalent to that afforded by legal persons and if they are subject to equivalent prudential supervision appropriate to their legal form.
1. Crypto-asset service providers authorised in accordance with Article 63 shall at all times meet the conditions for their authorisation.
1. A person who is not a crypto-asset service provider shall not use a name, or a corporate name, or issue marketing communications or undertake any other process suggesting that it is a crypto-asset service provider or that is likely to create confusion in that respect.
1. Competent authorities that grant authorisations in accordance with Article 63 shall ensure that such authorisations specify the crypto-asset services that crypto-asset service providers are authorised to provide.
1. Crypto-asset service providers shall be allowed to provide crypto-asset services throughout the Union, either through the right of establishment, including through a branch, or through the freedom to provide services. Crypto-asset service providers that provide crypto-asset services on a cross-border basis shall not be required to have a physical presence in the territory of a host Member State.
1. Crypto-asset service providers seeking to add crypto-asset services to their authorisation as referred to in Article 63 shall request the competent authorities that granted their initial authorisation for an extension of their authorisation by complementing and updating the information referred to in Article 62. The request for extension shall be processed in accordance with Article 63.

Relevant recitals

Recital 73 Union-level prudential regime for service providers

In most Member States, the provision of crypto-asset services is not yet regulated despite the potential risks that they pose to investor protection, market integrity and financial stability. To address such risks, this Regulation provides operational, organisational and prudential requirements at Union level applicable to crypto-asset service providers.

Recital 74 EU presence and effective management requirements

In order to enable effective supervision and to eliminate the possibility of evading or circumventing supervision, crypto-asset services should only be provided by legal persons that have a registered office in a Member State in which they carry out substantive business activities, including the provision of crypto-asset services. Undertakings that are not legal persons, such as commercial partnerships, should under certain conditions also be permitted to provide crypto-asset services. It is essential that providers of crypto-asset services maintain effective management of their activities in the Union in order to avoid undermining effective prudential supervision and to ensure the enforcement of requirements under this Regulation intended to ensure investor protection, market integrity and financial stability. Regular close direct contact between supervisors and the responsible management of crypto-asset service providers should be an essential element of such supervision. Crypto-asset service providers should therefore have their place of effective management in the Union, and at least one of the directors should be resident in the Union. The place of effective management means the place where the key management and commercial decisions that are necessary for the conduct of the business are taken.

Recital 76 National authorisation and Union-wide validity

Given the relatively small scale to date of crypto-asset service providers, the power to authorise and supervise such service providers should be conferred upon national competent authorities. Authorisation as a crypto-asset service provider should be granted, refused or withdrawn by the competent authority of the Member State where the entity has its registered office. Where an authorisation is granted, it should indicate the crypto-asset services for which the crypto-asset service provider is authorised and should be valid for the entire Union.

Table of contents

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