How to Obtain a MiCA License, Regulatory Framework, the Role of AML, and Liability for Non-Compliance

Under the European Union’s Markets in Crypto-Assets (MiCA) Regulation, crypto-asset service providers (CASPs) are required to obtain a license to operate legally within the Single Market. In Latvia, the licensing process is overseen by the Bank of Latvia, which acts as the national competent authority. A MiCA license grants the right to offer services throughout the European Economic Area (EEA), but also imposes strict obligations in terms of compliance, internal controls, and accountability.

To obtain a MiCA license, applicants must demonstrate a transparent ownership and management structure, effective risk management and internal control systems, segregation of client assets, and full compliance with Anti-Money Laundering (AML) and Know Your Customer (KYC) requirements. AML compliance is not a merely technical or formal obligation, it is a critical tool for ensuring market integrity and the stability of the financial system.

The MiCA framework stipulates that failure to comply with AML obligations, or involvement in illicit activities, may trigger criminal liability. According to Section 195 of the Latvian Criminal Law, money laundering offenses are punishable by imprisonment, asset confiscation, or restrictions on business activity.

MiCA demands genuine accountability, as demonstrated by recent precedents across Europe:

Malta (2025) – The European Securities and Markets Authority (ESMA) found that the Malta Financial Services Authority (MFSA) had issued a CASP license without a thorough risk assessment concerning the applicant’s business model, governance structure, conflict of interest management, and IT system security. MFSA received a formal warning and was instructed to significantly strengthen its licensing oversight to ensure MiCA compliance and maintain trust in the passporting regime. (Source: Reuters, 2025-07-10 https://www.financemagnates.com/cryptocurrency/esma-reviews-maltas-casp-licensing-flags-gaps-in-crypto-oversight/)

ESMA Warning (2025) – In several cases, ESMA noted that licensed CASPs were using their license in misleading marketing practices, such as promoting unregulated products alongside regulated ones, creating a false sense of security for consumers. This practice is considered a material investor risk and constitutes a breach that may jeopardize the continued use of the license. (Source: https://www.esma.europa.eu/press-news/esma-news/investors-should-consider-risks-unregulated-products-offered-regulated-crypto)

These cases confirm that the implementation of MiCA is under active supervision, and that failure to comply with licensing and operational requirements can result not only in reputational damage but also in legal and potentially criminal consequences.

Crypto-asset service providers are encouraged to proactively prepare for the licensing process by engaging with regulators and implementing appropriate internal policies to ensure a sustainable and compliant business model aligned with European regulatory standards.

To successfully obtain and retain a MiCA license, CASPs must ensure full compliance with regulatory requirements, internal control obligations, and corporate governance standards. Such an approach promotes legal certainty and fosters reliable operations within the Single Market, while mitigating the risks of license suspension or revocation.