MiCA & EU Crypto Regulation Glossary

Advice on Crypto-Assets MiCA Defined Terms

Per MiCA Article 3(1)(24), advice on crypto-assets is offering, giving, or agreeing to give personalised recommendations to a client, either at the client's request or on the CASP's own initiative, about transactions in crypto-assets. Generic market commentary is not advice; personalised recommendations are.

MiCA Article 3(1)(24) ↗

Airdrop White Paper & Token Issuance

An airdrop is the distribution of tokens to specified addresses or users at no direct cost. Exempt from MiCA white-paper requirements under Article 4(2)(b) where genuinely free and without conditions producing consideration. Conditional airdrops (e.g., requiring social-media follow) may not qualify.

MiCA Article 4(2)(b) ↗

Algorithmic Stablecoin Stablecoins (ART / EMT)

An algorithmic stablecoin maintains its peg through algorithmic supply expansion and contraction rather than asset reserves. MiCA effectively excludes purely-algorithmic stablecoins from the ART/EMT regimes by requiring reserves. The collapse of Terra/UST in 2022 informs MiCA's reserve requirements.

Anti-Money Laundering (AML) AML & Travel Rule

AML is the body of law preventing money laundering. EU framework: AMLR (2024/1624) directly applicable from July 2027; AMLD6 (2024/1640) at national infrastructure level; 5AMLD (2018/843) transitional. CASPs are obliged entities required to apply customer due diligence, monitoring, and reporting.

Anti-Money Laundering Authority (AMLA) EU Regulators & Authorities

AMLA is the European Anti-Money Laundering Authority established by Regulation (EU) 2024/1620, headquartered in Frankfurt. From 2028, AMLA directly supervises ~40 of the highest-risk cross-border obliged entities — including the largest cross-border CASPs that meet the selection criteria.

Regulation (EU) 2024/1620 ↗

Anti-Money Laundering Regulation (AMLR) AML & Travel Rule

The AMLR is the EU's single AML rulebook. As a Regulation (not Directive), it applies directly and identically across member states. Replaces the patchwork of national 5AMLD/6AMLD transpositions. Applies from 10 July 2027.

Regulation (EU) 2024/1624 ↗

Article 60 Notification Process & Authorisation

MiCA Article 60 establishes a 40-working-day notification route for entities already authorised under their respective sectoral regimes (CRR, EMD2, MiFID II, UCITS, AIFMD) to provide crypto-asset services. Notification, not authorisation — substantive MiCA conduct rules still apply.

MiCA Article 60 ↗

Asset Reserve Stablecoins (ART / EMT)

The ART reserve under MiCA Article 36 is the pool of liquid, high-quality assets that backs outstanding ARTs at all times. Composition, concentration limits, and custody arrangements are specified by EBA RTS. Reserve assets must equal or exceed the value of outstanding ARTs continuously.

MiCA Articles 36-38 ↗

Asset-Referenced Token (ART) MiCA Defined Terms

An ART is a type of crypto-asset that purports to maintain a stable value by referring to any other value or right, or a combination thereof, including one or more official currencies. Single-currency-pegged stablecoins are EMTs, not ARTs. Issuers of ARTs need authorisation under MiCA Title III.

MiCA Article 3(1)(6) ↗

Authorisation Withdrawal Process & Authorisation

Under MiCA Article 64, the home NCA may withdraw CASP authorisation for: serious breach of MiCA, fraud, failure to commence operations within 12 months, voluntary surrender, persistent non-compliance with conditions, or loss of substantive presence. Triggers orderly wind-down per Article 84.

MiCA Article 64 ↗

Automated Market Maker (AMM) DeFi & Crypto Technical

An AMM is a DeFi protocol where prices are determined by a mathematical formula applied to liquidity-pool reserves, rather than by an order book. Major examples: Uniswap (constant product), Curve (stable-swap), Balancer (multi-asset). Liquidity providers earn trading fees.

Autorité de Contrôle Prudentiel et de Résolution (France) (ACPR) EU Regulators & Authorities

The ACPR is the French prudential supervisor for banks, insurance, and investment firms. For French CASPs, the ACPR handles prudential supervision (own funds, governance, ICT resilience) while the AMF handles conduct supervision. The two-headed model is similar to Italy's CONSOB/Banca d'Italia split.

Autorité des Marchés Financiers (France) (AMF) EU Regulators & Authorities

The AMF is the French markets regulator and the designated MiCA NCA for conduct supervision. It runs one of the EU's most sophisticated supervisory regimes, with a strong PSAN history pre-MiCA. ACPR handles the prudential side; the AMF handles conduct, consumer protection, market integrity.

Autoriteit Financiële Markten (Netherlands) (AFM) EU Regulators & Authorities

The AFM is the Dutch markets-conduct supervisor and the MiCA NCA for the Netherlands. It is one of only two EU NCAs accepting CASP applications in English (the other is Ireland). The DNB handles AML supervision and prudential matters in coordination with the AFM.

Banca d'Italia EU Regulators & Authorities

Banca d'Italia is the Italian central bank and the prudential supervisor for CASPs under Italy's split-supervisor MiCA model. Handles own-funds calculation, governance arrangements, ICT risk management, and AML supervision. Works with CONSOB on coordinated case files.

Bank of Lithuania (BoL) EU Regulators & Authorities

The Bank of Lithuania is the Lithuanian central bank and the designated MiCA NCA. It runs the highest-throughput CASP authorisation pipeline in the EU — 3-5 months for Class 1/2 files, 5-7 months for Class 3. AML supervision is split with the FCIS.

Bankruptcy-Remoteness Custody & Safeguarding

Bankruptcy-remoteness places client crypto-assets outside the CASP's insolvency estate under home-state insolvency law. Typically achieved via trust structures (Ireland, Luxembourg), separate corporate entities (Germany), or statutory ring-fence provisions (Lithuania). Required by MiCA Article 75.

MiCA Article 75 ↗

Beneficial Ownership (BO) AML & Travel Rule

Beneficial ownership identifies the natural person(s) who ultimately own or control a customer that is a legal entity. The threshold is 25% direct or indirect ownership of capital or voting rights, or control by other means. AMLR requires verification against the national beneficial-ownership register.

Blockchain DeFi & Crypto Technical

A blockchain is a specific type of DLT organising transactions in cryptographically-linked blocks, with each block referencing the prior block. Public blockchains (Bitcoin, Ethereum) are permissionless; private blockchains (Hyperledger Fabric) are permissioned. MiCA is technology-neutral but most crypto-assets use blockchain DLT.

Branch Establishment Cross-Border & Passport

Branch establishment is the creation of a physical operational presence in a host EU member state — local office, dedicated host-state staff, host-state senior management. Requires a separate notification including operational details, beyond the basic passport notification.

MiCA Article 65 ↗

Bridge (Cross-Chain) DeFi & Crypto Technical

A cross-chain bridge transfers crypto-assets between different blockchains by locking the asset on the source chain and minting a wrapped representation on the destination chain. Operated by an identifiable legal entity (even with smart-contract automation) — typically falls within MiCA CASP scope for transfer services.

Canadian Securities Administrators (CSA) Non-EU Regulators

The CSA is the umbrella organisation of Canada's 13 provincial and territorial securities regulators. Canadian crypto-asset platforms register as MSBs federally with FINTRAC and as restricted dealers / crypto-asset trading platforms with provincial regulators (most importantly the OSC in Ontario).

Capital Requirements Regulation (CRR) Stablecoins (ART / EMT)

The CRR (Regulation (EU) No 575/2013) establishes prudential rules for credit institutions and investment firms in the EU. MiCA Article 67 references the CRR's CET1 definition for the quality standard of CASP own funds. CRR-authorised credit institutions can issue EMTs/ARTs via the Article 17 route.

Regulation (EU) No 575/2013

CASP Authorisation Process & Authorisation

CASP authorisation is the formal regulatory permission to provide crypto-asset services in the EU. Granted by the home NCA under MiCA Article 63 within a 5-month statutory clock from complete file. Authorisation specifies the authorised service set; expanding scope requires variation.

MiCA Article 63 ↗

Central Bank of Ireland (CBI) EU Regulators & Authorities

The CBI is the Irish central bank and the designated MiCA NCA. English-only filing, 12.5% corporate tax, and the strongest institutional reputational signal among EU jurisdictions. Heaviest substance requirements; longest substantive review timelines.

Circulating Supply White Paper & Token Issuance

Circulating supply is the number of tokens publicly available for trading at a given moment. Excludes tokens held in vesting contracts, reserves, or burn addresses. Important market-data point for valuation; used to calculate market cap.

Close Links MiCA Defined Terms

Close links exist where two persons are linked by participation (20%+ ownership), control, or a permanent contractual relationship. The concept is used in MiCA to identify situations that could impair effective supervision.

MiCA Article 3(1)(31) ↗

Cold Storage Custody & Safeguarding

Cold storage holds private keys offline — air-gapped, hardware-secured, geographically distributed. Protects against network-based attacks. ESMA's 2025 RTS on safeguarding requires CASPs to hold at least 80% of client crypto-assets in cold storage.

ESMA RTS on safeguarding

Comisión Nacional del Mercado de Valores (Spain) (CNMV) EU Regulators & Authorities

The CNMV is the Spanish securities markets regulator and the designated MiCA CASP supervisor. AML supervision is split with SEPBLAC. The CNMV applies investment-firm-style governance expectations to CASP files; the supervisory dialogue is rigorous but accessible.

Commission de Surveillance du Secteur Financier (Luxembourg) (CSSF) EU Regulators & Authorities

The CSSF is Luxembourg's single financial-services supervisor for banks, asset managers, insurance, and now MiCA CASPs. Applies institutional standards calibrated to Luxembourg's asset-management ecosystem. Heaviest substance threshold and longest timeline in the EU's top-tier jurisdictions.

Commissione Nazionale per le Società e la Borsa (Italy) (CONSOB) EU Regulators & Authorities

CONSOB is the Italian securities markets regulator and the designated MiCA conduct supervisor. Italy uses a split-supervisor model: CONSOB chairs the authorisation process and handles conduct, consumer protection, market integrity. Banca d'Italia handles prudential and AML.

Commodity Futures Trading Commission (US) (CFTC) Non-EU Regulators

The CFTC regulates US commodity-futures markets and has asserted jurisdiction over crypto-asset derivatives and the spot market for crypto-assets classified as commodities. Bitcoin and Ether are widely viewed as commodities within CFTC scope.

Competent Authority (NCA) MiCA Defined Terms

Each EU member state designates a national competent authority (NCA) responsible for MiCA implementation. Examples: Bank of Lithuania, BaFin (Germany), AMF (France), CySEC (Cyprus). The home NCA grants CASP authorisation; host NCAs receive passport notifications.

MiCA Article 93 ↗

Consensus Mechanism DeFi & Crypto Technical

A consensus mechanism is the protocol that nodes follow to agree on which transactions are valid and added to the blockchain. Main types: Proof of Work (Bitcoin), Proof of Stake (Ethereum post-Merge, Solana, Cardano), and variants (DPoS, Tendermint BFT, etc.).

Control MiCA Defined Terms

Control under MiCA references the Directive 2013/34/EU definition: holding a majority of voting rights, the right to appoint/remove a majority of management body members, or the right to exercise dominant influence over the undertaking. Used in qualifying-holdings and close-links analysis.

MiCA Article 3(1)(31) ↗

Correspondent Relationship AML & Travel Rule

A correspondent relationship between CASPs (or between a CASP and a non-EU institution) is analogous to correspondent banking. Triggers EDD requirements: due diligence on the counterparty institution's AML controls, ongoing monitoring, restrictions on sub-correspondent relationships.

Counter-Financing of Terrorism (CFT) AML & Travel Rule

CFT is the parallel legal framework to AML, focused on disrupting financial flows that support terrorism. Treated jointly with AML under EU and FATF frameworks. Obliged entities apply integrated AML/CFT programmes covering both money laundering and terrorism-financing typologies.

Credit Institution Stablecoins (ART / EMT)

A credit institution is an undertaking authorised to take deposits and grant credit under the CRR. Credit institutions benefit from streamlined routes into crypto-asset business: Article 17 for EMT/ART issuance (notification only) and Article 60 for CASP services (notification only).

CRR Article 4(1)(1)

Cross-Border Services Cross-Border & Passport

Cross-border services are crypto-asset services provided into a host state remotely, without establishing a physical branch or subsidiary. The standard MiCA passport mechanism covers cross-border services. Establishing a branch or subsidiary triggers additional notification and supervisory engagement.

Crypto-asset MiCA Defined Terms

Under MiCA Article 3(1)(5), a crypto-asset is a digital representation of a value or a right that can be transferred and stored electronically, using distributed ledger technology or similar technology. The definition is technology-neutral and captures fungible and non-fungible tokens — though NFTs may be exempt under Article 2(3).

MiCA Article 3(1)(5) ↗

Crypto-Asset Service Provider (CASP) MiCA Defined Terms

A CASP is any legal person or undertaking whose occupation or business is providing one or more of the crypto-asset services listed in MiCA Article 3(1)(16) on a professional basis to third parties. CASPs require authorisation under Article 63 (or notification under Article 60 for credit institutions, investment firms, EMIs, UCITS managers, and AIFMs).

MiCA Article 3(1)(15) ↗

Crypto-Asset White Paper MiCA Defined Terms

A crypto-asset white paper is the disclosure document required under MiCA Articles 6, 19, and 51 (depending on token type) before a public offer or admission to trading. Content is specified by ESMA RTS. The home NCA receives the white paper notification at least 20 working days before the offer commences.

MiCA Article 6 (Title II); Article 19 (Title III) ↗

Crypto-Backed Stablecoin Stablecoins (ART / EMT)

A crypto-backed stablecoin maintains stable value through over-collateralisation with other crypto-assets. Examples include DAI (collateralised by ETH and other crypto-assets). Under MiCA, these often fall outside the EMT/ART definitions if the value-reference mechanism is to crypto rather than fiat or other assets.

Custody and Administration of Crypto-Assets MiCA Defined Terms

Under MiCA Article 3(1)(17), this is the safekeeping or controlling, on behalf of clients, of crypto-assets or of the means of access to such crypto-assets, where applicable in the form of private cryptographic keys. Subject to Article 75 safeguarding rules.

MiCA Article 3(1)(17); Article 75 ↗

Customer Due Diligence (CDD) AML & Travel Rule

CDD is the AML obligation under AMLR/5AMLD requiring obliged entities to identify and verify customer identity, understand the nature of the business relationship, and conduct ongoing monitoring. Three levels: standard CDD, simplified CDD (SDD), enhanced CDD (EDD).

Cyprus Securities and Exchange Commission (CySEC) EU Regulators & Authorities

CySEC is the Cypriot securities supervisor and the designated MiCA NCA for Cyprus. It runs one of the more accessible CASP authorisation pipelines in the EU — 4-6 months for clean files, EUR 50-150k capital, lighter substance than Estonia or Ireland but real.

De Nederlandsche Bank (DNB) EU Regulators & Authorities

DNB is the Dutch central bank. Pre-MiCA, DNB ran the Netherlands' crypto-asset register from 2020. Under MiCA, supervisory primacy moved to the AFM; DNB retained AML supervisory authority and a prudential coordination role.

Decentralised Autonomous Organisation (DAO) DeFi & Crypto Technical

A DAO is an organisation governed by on-chain voting, typically through a governance token. Often operates with an off-chain legal-entity wrapper (Cayman Foundation, Wyoming DAO LLC, Liechtenstein Trust). MiCA does not exempt DAOs from the CASP perimeter where they provide crypto-asset services.

Decentralised Finance (DeFi) DeFi & Crypto Technical

DeFi covers crypto-asset financial services operating on smart-contract protocols rather than through traditional intermediaries. MiCA excludes genuinely autonomous DeFi via Article 2(2)(e); but protocols with identifiable frontend or governance entities fall within scope as CASPs.

MiCA Article 2(2)(e); Recital 22 ↗

Digital Operational Resilience Act (DORA) Operational Resilience (DORA)

DORA is the EU framework for ICT risk management and operational resilience in financial services. Applies to CASPs alongside MiCA. Five pillars: ICT risk management, incident reporting, digital operational resilience testing, third-party risk management, information sharing. In force from 17 January 2025.

Regulation (EU) 2022/2554 ↗

Distributed Ledger Technology (DLT) MiCA Defined Terms

DLT means a technology that enables the operation and use of distributed ledgers. Distributed ledgers are information repositories that record transactions and are shared across, and synchronised between, a set of DLT network nodes. The most common DLT is blockchain.

MiCA Article 3(1)(1); Regulation (EU) 2022/858 ↗

E-money Token (EMT) MiCA Defined Terms

An EMT is a crypto-asset that purports to maintain a stable value by referring to the value of a single official currency. EMTs are regulated under MiCA Title IV via the EMD2 framework — issuers must be credit institutions or electronic money institutions (EMIs). Holders have a permanent right of at-par redemption.

MiCA Article 3(1)(7) ↗

EBA Guidelines Process & Authorisation

EBA Guidelines parallel ESMA Guidelines in EBA-supervised areas — ART issuer reserves, custody operations, AML/CFT for CASPs, recovery and resolution planning. Same "comply or explain" mechanism. Comply-with-explanation must be substantive, not formulaic.

EBA Significance Criteria Stablecoins (ART / EMT)

The EBA uses size and interconnection thresholds: user count (10M+ for EMTs, similar for ARTs), outstanding amount (EUR 5B+ for EMTs), cross-border use (7+ member states), and interconnections with the financial system. Designation triggers direct EBA supervision.

MiCA Articles 43 (ART) and 56 (EMT) ↗

Electronic Money Stablecoins (ART / EMT)

E-money is electronically stored monetary value, including magnetically stored, representing a claim on the issuer, issued on receipt of funds for the purpose of payment transactions. Under EMD2 (Directive 2009/110/EC). MiCA Title IV applies the e-money framework to EMTs.

EMD2 (Directive 2009/110/EC) ↗

Electronic Money Institution (EMI) Stablecoins (ART / EMT)

An EMI is an institution authorised under EMD2 (Directive 2009/110/EC) to issue electronic money but not to take deposits. EMIs can issue EMTs by notification under MiCA Article 48 — leveraging their existing EMD2 authorisation. The route is widely used in Lithuania and Malta.

EMD2; MiCA Article 48 ↗

Emission Schedule White Paper & Token Issuance

The emission schedule specifies how new tokens are created over time. Examples: Bitcoin's halving every 4 years (decreasing supply curve); Ethereum's variable issuance based on staking participation; capped tokens with no further emission. Disclosed in MiCA white papers.

Enhanced Due Diligence (EDD) AML & Travel Rule

EDD is the strengthened CDD applied to high-risk customer categories: politically exposed persons (PEPs), customers from high-risk third countries, anonymous or pseudonymous transactions above thresholds, complex beneficial-ownership structures. Triggers more rigorous verification and ongoing monitoring.

Equivalence Determination Cross-Border & Passport

An equivalence determination is a Commission decision that a third-country regulatory framework provides equivalent protection to MiCA. Enables specific cross-border supervisory cooperation arrangements. As of 2026 no general MiCA equivalence has been issued; bilateral supervisory MoUs cover specific matters.

ESMA Guidelines Process & Authorisation

ESMA Guidelines are non-binding instruments under Article 16 of the ESMA Regulation. NCAs and supervised entities must comply or explain why they don't. Examples: Guidelines on the application of MiCA Article 7 to influencer marketing; Guidelines on supervisory cooperation for white papers.

ESMA Regulation Article 16

ESMA Register Process & Authorisation

ESMA maintains the EU-wide public register of authorised CASPs, notified ART and EMT issuers, and significant-entity designations. Searchable, machine-readable. The single authoritative source for verifying CASP authorisation status across the EU.

MiCA Article 109 ↗

Estonian Financial Supervision Authority (EFSA) EU Regulators & Authorities

The EFSA is the Estonian financial supervisor and the MiCA NCA. Professional, accessible supervisor in a low-cost EU jurisdiction. Six-month typical timeline for clean CASP files; English working dialogue accepted for supervisory engagement (formal filing in Estonian).

EU Passport Cross-Border & Passport

The EU passport under MiCA Article 65 is the right of an authorised CASP to provide services in any other EU member state via a 15-working-day notification. One authorisation, twenty-seven member states. Host NCAs cannot block on substantive grounds; can engage on AML and consumer-protection issues.

MiCA Article 65 ↗

European Banking Authority (EBA) EU Regulators & Authorities

The EBA is the EU agency for banking supervisory convergence. Under MiCA, the EBA produces RTS on ART reserves, capital, and white-paper content, directly supervises significant ART issuers under Article 43, and chairs supervisory colleges for significant EMT issuers.

European Central Bank (ECB) EU Regulators & Authorities

The ECB supervises significant credit institutions in the euro area under the SSM. Where a credit institution issues EMTs or ARTs under MiCA Article 17, the ECB engages on the prudential side. The ECB also plays a role in the DLT Pilot Regime for central-bank money settlement.

European Insurance and Occupational Pensions Authority (EIOPA) EU Regulators & Authorities

EIOPA is the EU agency for insurance supervisory convergence. Its MiCA role is narrower than ESMA or EBA — primarily around insurance policies that can substitute for CASP own funds under Article 67(5), and on the insurance-sector boundaries with crypto-asset activity.

European Securities and Markets Authority (ESMA) EU Regulators & Authorities

ESMA is the EU agency responsible for supervisory convergence in securities markets. Under MiCA, ESMA produces RTS and ITS implementing-act drafts, maintains the EU-wide CASP register, designates significant CASPs under Article 85, and chairs supervisory colleges for the largest cross-border platforms.

Exchange of Crypto-Assets for Funds MiCA Defined Terms

Under MiCA Article 3(1)(20), this service involves the conclusion of purchase or sale contracts concerning crypto-assets against fiat currency, by using own capital. A core Class 2 CASP service, also known as on/off-ramping.

MiCA Article 3(1)(20) ↗

Exchange of Crypto-Assets for Other Crypto-Assets MiCA Defined Terms

Under MiCA Article 3(1)(21), this is the conclusion of purchase or sale contracts concerning crypto-assets for other crypto-assets, by using own capital. A core Class 2 CASP service that typically operates alongside fiat exchange services.

MiCA Article 3(1)(21) ↗

Execution of Orders on Behalf of Clients MiCA Defined Terms

Per MiCA Article 3(1)(19), the execution service is the conclusion of agreements to buy or sell one or more crypto-assets on behalf of clients. Includes the conclusion of contracts to sell crypto-assets at the moment of their offer to the public or admission to trading.

MiCA Article 3(1)(19) ↗

Federal Financial Supervisory Authority (Germany) (BaFin) EU Regulators & Authorities

BaFin is the German federal financial supervisor — supervises banks, insurance, securities, and now MiCA CASPs. The single-supervisor model produces administrative simplicity but the bar is uniformly high. Heaviest substance requirements in the EU; longest typical timelines.

Fiat-Backed Stablecoin Stablecoins (ART / EMT)

A fiat-backed stablecoin maintains stable value by holding fiat currency reserves. Under MiCA, single-currency fiat-backed stablecoins are EMTs (Title IV); multi-currency or basket-backed are ARTs (Title III). Examples: USDC (USD-backed), Société Générale EUR CoinVertible.

Fifth Anti-Money Laundering Directive (5AMLD) AML & Travel Rule

5AMLD extended AML obligations to virtual currency exchange and custodian wallet providers from January 2020. Each member state transposed differently, producing the patchwork that AMLR (2027) replaces. Pre-MiCA crypto-asset registers in most EU member states were 5AMLD-based.

Directive (EU) 2018/843

Financial Action Task Force (FATF) AML & Travel Rule

The FATF is the inter-governmental body that sets the global standards on AML and CFT. Its 40 Recommendations are followed by 200+ jurisdictions. Recommendation 15 covers virtual-asset service providers; Recommendation 16 (the Travel Rule) requires data accompanying virtual-asset transfers.

Financial Conduct Authority (UK) (FCA) Non-EU Regulators

The FCA is the UK conduct supervisor for financial services. UK crypto-asset firms register under the Money Laundering Regulations 2017. The UK's post-Brexit framework is broadly parallel to MiCA but separate; no automatic EU passport between the UK and EU.

Financial Crimes Enforcement Network (US) (FinCEN) Non-EU Regulators

FinCEN is the US Treasury bureau enforcing the Bank Secrecy Act. Crypto exchanges operating in the US must register as Money Services Businesses (MSBs) — federal-level registration. State-level money-transmitter licensing applies in parallel.

Financial Intelligence Unit (FIU) AML & Travel Rule

Each jurisdiction has an FIU receiving STRs/SARs and conducting AML intelligence analysis. EU FIUs: UIF (Italy), CTIF-CFI (Belgium), TRACFIN (France), Hungarian FIU (Hungary), Cellule de Renseignement Financier (Luxembourg), etc. FIUs cooperate via the Egmont Group internationally.

Financial Market Authority (Austria) (FMA) EU Regulators & Authorities

The FMA is the Austrian financial markets supervisor. Applies banking-grade standards to MiCA CASP authorisation. Strong DACH-region positioning at materially lower setup cost than Germany; single-supervisor model produces administrative simplicity.

Financial Services and Markets Authority (Belgium) (FSMA) EU Regulators & Authorities

The FSMA is the Belgian conduct supervisor and the designated MiCA NCA. NBB handles credit-institution-CASP supervision under Article 60 and AML. Small but engaged supervisor; strategic for platforms valuing EU institutional proximity (Brussels-based).

Financial Services Commission (Korea) (FSC) Non-EU Regulators

The FSC supervises South Korea's financial markets and crypto-asset business under the Virtual Asset User Protection Act (operational July 2024). Strict consumer-protection focus and reserve requirements for crypto-asset exchanges.

Fit and Proper Assessment Process & Authorisation

Fit and proper assessment is the NCA's evaluation of senior managers and qualifying shareholders during CASP authorisation. Covers professional knowledge, experience, reputation, financial soundness, criminal record, and time commitment. Failure to meet standards is a refusal ground.

MiCA Article 68 ↗

Front-Running Market Abuse (MiCA Title VI)

Front-running is the practice of trading on knowledge of a pending client order before executing the client order itself — capturing the price-impact benefit for the CASP. Conduct breach under MiCA Articles 66-73 and a category of market manipulation under Article 91.

Fully Diluted Valuation (FDV) White Paper & Token Issuance

FDV is the token valuation calculated using the maximum total supply rather than current circulating supply. Reflects the theoretical market cap if all tokens were released. Often substantially higher than market cap; significant for investors evaluating long-term value dilution.

Governance Token DeFi & Crypto Technical

A governance token grants holders voting rights over a DeFi protocol's operational decisions — fee structure, treasury management, protocol upgrades. Examples: UNI (Uniswap), AAVE, MKR (MakerDAO). Under MiCA, governance tokens often fall within Title II scope as crypto-assets.

Group MiCA Defined Terms

A group under MiCA includes a parent undertaking and all its subsidiary undertakings. Group-level prudential supervision applies for significant CASPs and ART/EMT issuers. Intra-group transactions are subject to specific transparency requirements.

MiCA Article 3(1)(31) ↗

Hardware Security Module (HSM) Custody & Safeguarding

An HSM is a physical computing device that safeguards and manages cryptographic keys, performing encryption/decryption inside its tamper-resistant boundary. CASPs use HSMs to protect master keys, signing keys, and other sensitive cryptographic material.

High-Risk Third Country AML & Travel Rule

High-risk third countries are non-EU jurisdictions identified by the European Commission as having strategic AML/CFT deficiencies. List published as a delegated act; updated periodically. Transactions involving these jurisdictions trigger EDD obligations for CASPs.

AMLR; Commission Delegated Regulation

Home Competent Authority MiCA Defined Terms

The home competent authority is the NCA in the member state where a CASP or crypto-asset issuer is established. It grants authorisation, supervises ongoing compliance, and processes passport notifications for cross-border service. The home NCA is the primary supervisory counterparty for the regulated entity.

MiCA Article 3(1)(31) ↗

Home State Cross-Border & Passport

The home state is the EU member state where a CASP has its registered office and head office, and where it holds MiCA authorisation. The home NCA is the primary supervisor for authorisation, conduct, prudential, and AML matters.

Hong Kong Monetary Authority (HKMA) Non-EU Regulators

The HKMA is Hong Kong's central bank-equivalent. Co-regulates stablecoin issuers alongside the SFC under the Stablecoin Ordinance (operational 2025). Supervises authorised banks providing crypto-asset services.

Host Competent Authority MiCA Defined Terms

The host competent authority is the NCA in a member state where a CASP operates via the MiCA passport but does not have its registered office. The host NCA receives the passport notification, may engage on AML and consumer-protection matters, but cannot block the passport on substantive grounds.

MiCA Article 3(1)(32) ↗

Host State Cross-Border & Passport

A host state is an EU member state in which a CASP provides services via the MiCA passport but does not have its registered office. Host-state NCAs engage on AML supervision, consumer-protection matters, and host-state-specific consumer-law overlays.

Hot Wallet Custody & Safeguarding

A hot wallet has its private keys on internet-connected infrastructure, enabling fast trading and withdrawals. Exposed to network attacks. ESMA RTS caps client crypto-assets in hot wallets at 20% (with documented risk-assessment exceptions).

Implementing Technical Standards (ITS) Process & Authorisation

ITS are EU implementing acts that specify the uniform conditions of application for MiCA rules — typically forms, templates, reporting procedures. Drafted by ESMA/EBA, adopted by the Commission. Examples: ITS on CASP application forms, ITS on supervisory reporting templates.

Individual Segregation Custody & Safeguarding

Individual segregation maintains a unique wallet per client for that client's crypto-assets. More expensive operationally (per-wallet gas costs, key management) but easier to demonstrate to supervisors. Common for institutional clients and high-value retail.

Initial Coin Offering (ICO) White Paper & Token Issuance

An ICO is the typical structure for raising funds through a token sale, where the issuer sells tokens directly to investors. Predominant in 2017-2018 fundraising cycle; since regulated under MiCA Title II/III/IV depending on token classification.

Initial Exchange Offering (IEO) White Paper & Token Issuance

An IEO is a token sale conducted through a centralised exchange. The exchange handles distribution, KYC, and the technical sale infrastructure on behalf of the issuer. Under MiCA, the exchange is providing the "placing of crypto-assets" service; the issuer remains the substantive offeror.

Insider Dealing Market Abuse (MiCA Title VI)

Insider dealing is using inside information to buy, sell, cancel, or amend orders in crypto-assets. Prohibited under MiCA Article 89. Inside information is specific information about a crypto-asset or issuer that has not been made public and that would significantly affect the price.

MiCA Article 89 ↗

Interim Suspension Stablecoins (ART / EMT)

Under MiCA, NCAs can temporarily suspend ART or EMT issuance, marketing, or redemption where there is reasonable suspicion of breach. Interim suspension is a precautionary supervisory tool; it does not require formal authorisation withdrawal.

MiCA Article 105 ↗

Issuer MiCA Defined Terms

Under MiCA Article 3(1)(10), an issuer is a natural or legal person who issues crypto-assets. The issuer bears the obligation to prepare and publish the white paper, comply with marketing rules, and (for ARTs/EMTs) maintain ongoing authorisation requirements.

MiCA Article 3(1)(10) ↗

Japan Financial Services Agency (JFSA) Non-EU Regulators

The JFSA is Japan's integrated financial regulator. Japan was an early-mover on crypto-asset regulation via the 2017 Payment Services Act amendments. Strict licensing for crypto-asset exchange service providers; rigorous AML and customer-asset segregation requirements.

Know Your Customer (KYC) AML & Travel Rule

KYC is the identity-verification process that obliged entities apply to customers. Components: identification (collect data), verification (cross-check against documents), risk assessment, ongoing monitoring. CASPs apply KYC at onboarding and re-apply periodically.

Layer 1 (L1) DeFi & Crypto Technical

A Layer 1 blockchain is the base protocol where transactions are settled and consensus is reached. Examples: Bitcoin, Ethereum, Solana, Avalanche, Cosmos. Layer 1 design constraints (throughput, latency, cost) drive much of the crypto-asset technical architecture.

Layer 2 (L2) DeFi & Crypto Technical

Layer 2 protocols (Optimism, Arbitrum, Polygon, zkSync) operate on top of a Layer 1 blockchain to provide higher transaction throughput and lower costs while inheriting L1 security. Distinct from sidechains (separate consensus). MiCA generally treats L2-issued tokens the same as L1-issued tokens.

Liquidity Management (Stablecoin) Stablecoins (ART / EMT)

Liquidity management for stablecoin issuers covers reserve composition (sufficient liquid assets), redemption-flow monitoring, stress-redemption planning, and operational arrangements ensuring same-working-day settlement of holder redemptions. ESMA and EBA RTS specify minimum standards.

Liquidity Pool DeFi & Crypto Technical

A liquidity pool is a smart contract holding deposited crypto-assets that enable AMM-based trading. Liquidity providers (LPs) deposit assets in exchange for LP tokens representing their share; earn trading fees in proportion to their share. Subject to impermanent-loss risk.

Lock-Up Period White Paper & Token Issuance

A lock-up period restricts the transfer or sale of tokens for a specified period after distribution. Used to prevent immediate sell-pressure from early investors. Typical for team allocations, advisors, and private-sale participants. Disclosed in the MiCA white paper.

Malta Financial Services Authority (MFSA) EU Regulators & Authorities

The MFSA is the Maltese financial services regulator. Malta was an early-mover on crypto-asset regulation with the 2018 Virtual Financial Assets Act. Under MiCA the MFSA applies its established VFA supervisory experience to CASP authorisation; substance bar is moderate.

Management Body MiCA Defined Terms

Per MiCA Article 3(1)(28), the management body includes the supervisory and managerial functions. Members must meet fit-and-proper standards. The body is responsible for the CASP's strategy, risk management, governance, and compliance.

MiCA Article 3(1)(28); Article 68 ↗

Market Abuse Regulation (MAR) Market Abuse (MiCA Title VI)

MAR (Regulation (EU) No 596/2014) is the EU framework for market abuse in financial instruments. MiCA Title VI applies a parallel framework to crypto-asset markets, drawing extensively on MAR's approach. For crypto-assets that are MiFID II financial instruments, MAR applies; for MiCA-scope crypto-assets, MiCA Title VI applies.

Regulation (EU) No 596/2014

Market Making Market Abuse (MiCA Title VI)

Market making is the practice of continuously quoting buy and sell prices for a crypto-asset, providing liquidity to the market. Legitimate when carried out under proper market-making arrangements. Distinct from manipulative pattern (e.g., wash trading) that mimics market making.

Market Manipulation Market Abuse (MiCA Title VI)

Market manipulation under MiCA Article 91 includes transactions or orders that give false or misleading signals about supply, demand, or price; transactions affecting the price by employing fictitious devices; dissemination of false information likely to affect prices. Wash trading, spoofing, pump-and-dump all fall within.

MiCA Article 91 ↗

Material Change Notification Process & Authorisation

Under MiCA, CASPs notify the home NCA of material changes to the conditions under which authorisation was granted — new crypto-asset services, change in qualifying holdings, governance changes, material changes in business plan. Some changes require pre-approval, others post-event notification.

MiCA Article 64 ↗

Memorandum of Understanding (MoU) Cross-Border & Passport

An MoU is a formal but non-binding agreement between regulators establishing the terms for information-sharing, joint inspections, and supervisory cooperation. ESMA and EU NCAs have MoUs with regulators in major non-EU jurisdictions covering crypto-asset matters.

Monetary Authority of Singapore (MAS) Non-EU Regulators

The MAS is Singapore's integrated financial regulator. The Payment Services Act 2019 establishes the Digital Payment Token (DPT) framework — licensing for crypto-asset services. Strict consumer-protection focus; institutional clients widely served.

Money Laundering Reporting Officer (MLRO) AML & Travel Rule

The MLRO is the senior officer designated within an obliged entity (including CASPs) with responsibility for AML/CFT compliance — programme oversight, STR filing, regulator engagement. Required to be a substantive role with authority; MLRO appointment is documented in the CASP authorisation file.

Multi-Asset Basket Stablecoins (ART / EMT)

The multi-asset basket is the set of reference assets an ART tracks. Single-currency stablecoins are EMTs, not ARTs. Basket composition is disclosed in the ART white paper and reviewed by the NCA. Concentration and asset-quality limits apply under the EBA RTS.

Multi-Party Computation (MPC) Custody & Safeguarding

MPC custody splits a private key across multiple parties using cryptographic protocols so that no single party ever holds the complete key. Used as an alternative to multisig — provides similar security with more operational flexibility.

Multi-Signature Wallet Custody & Safeguarding

Multi-signature (multisig) wallets require multiple cryptographic signatures from independent key-holders to authorise transactions. Removes single-key compromise risk; introduces governance complexity. Standard pattern for CASP cold storage.

National Bank of Belgium (NBB) EU Regulators & Authorities

The NBB is Belgium's central bank. Under MiCA, the NBB supervises credit institutions notifying for crypto-asset services under Article 60, handles AML supervision for financial institutions, and coordinates with the FSMA on substantive MiCA matters.

National CASP Register Process & Authorisation

Each NCA maintains a public register of CASPs authorised in its jurisdiction. Includes authorised service set, qualifying-holdings information, and any supervisory measures. National registers feed into the ESMA EU-wide register.

MiCA Article 109 ↗

National Competent Authority (NCA) EU Regulators & Authorities

Each EU member state designates one or more NCAs for MiCA implementation. The NCA grants CASP authorisation, supervises ongoing compliance, receives passport notifications, and engages with ESMA on supervisory convergence. NCAs vary in style — Bank of Lithuania is fast; CSSF is institutional; BaFin is banking-grade.

MiCA Article 93 ↗

New York State Department of Financial Services (NYDFS) Non-EU Regulators

NYDFS supervises financial institutions in New York State. The BitLicense regime (since 2015) is the most rigorous US state-level crypto-asset framework. Banks chartered under NYDFS may also offer crypto-asset custody under specific guidance.

Node DeFi & Crypto Technical

A node is any computer running the software protocol for a specific blockchain. Full nodes verify all transactions and blocks; light nodes verify selectively; archive nodes retain the full historical state. CASPs typically operate validator nodes or RPC infrastructure rather than mining nodes.

Offeror MiCA Defined Terms

An offeror is a natural or legal person, or the issuer, who offers crypto-assets to the public. In primary issuance the issuer and offeror are typically the same. In secondary offerings, a separate offeror may emerge (e.g., an exchange listing a previously-issued token).

MiCA Article 3(1)(13) ↗

Office of the Comptroller of the Currency (US) (OCC) Non-EU Regulators

The OCC charters and supervises US national banks. The OCC has issued interpretive letters allowing national banks to custody crypto-assets and engage in stablecoin activities. Federal preemption may apply over state-level money-transmitter rules for OCC-chartered entities.

Omnibus Account Custody & Safeguarding

An omnibus account pools client crypto-assets in a shared wallet structure separate from the CASP's own assets. The CASP's internal ledger identifies each client's share. Permitted under MiCA Article 75 with daily reconciliation between ledger and on-chain holdings.

Order Book Manipulation Market Abuse (MiCA Title VI)

Order book manipulation covers practices like layering (placing multiple orders at different price levels to mislead other traders) and quote stuffing (rapid order placement and cancellation). Detected through surveillance algorithms; CASPs operating trading platforms have surveillance obligations under MiCA.

Own Funds MiCA Defined Terms

CASP own funds under MiCA Article 67 are the prudential capital the CASP must maintain at all times: the higher of (a) a permanent minimum capital floor by service class (EUR 50k / 125k / 150k) or (b) one-quarter of the previous year's fixed overheads. Must be CET1 quality per CRR Article 26.

MiCA Article 67; Annex IV ↗

Par Value Redemption Stablecoins (ART / EMT)

Under MiCA Article 55, EMT holders have a permanent right of redemption at par value — 1:1 with the reference currency. No fees for redemptions below EUR 100,000 per holder per 1-month period. Settlement within the working day.

MiCA Article 55 ↗

Parent Undertaking MiCA Defined Terms

Under Directive 2013/34/EU referenced by MiCA, a parent undertaking is one that has the right to exercise control over a subsidiary. Group structures with parent-subsidiary relationships have consolidated prudential and reporting obligations under MiCA.

MiCA Article 3(1)(31) ↗

Passport Notification Process & Authorisation

A passport notification under MiCA Article 65 extends a CASP's home-state authorisation to provide services in another EU member state. The CASP notifies the home NCA at least 15 working days before commencement; the home NCA forwards to the host NCA; service may commence on day 16.

MiCA Article 65 ↗

Placing of Crypto-Assets MiCA Defined Terms

Placing is a Class 1 CASP service per MiCA Article 3(1)(23). The CASP places crypto-assets with one or more specified purchasers — typically institutional clients in a private placement. Distinct from public offerings, which trigger different white-paper rules.

MiCA Article 3(1)(23) ↗

Politically Exposed Person (PEP) AML & Travel Rule

A PEP is a natural person who is or has been entrusted with prominent public functions, including heads of state, senior politicians, senior judicial figures, senior military, and similar. Family members and close associates also receive PEP-status. Triggers EDD.

AMLR Article 22-24 ↗

Portfolio Management of Crypto-Assets MiCA Defined Terms

Per MiCA Article 3(1)(25), portfolio management is managing portfolios in accordance with mandates given by clients on a discretionary client-by-client basis where such portfolios include one or more crypto-assets. The MiCA service overlaps significantly with MiFID II portfolio management for securities.

MiCA Article 3(1)(25) ↗

Private Key Custody & Safeguarding

A private key is the cryptographic key that authorises transactions from a crypto-asset address. Possession of the private key is effectively ownership of the assets at that address. CASPs custody private keys on behalf of clients under MiCA Article 75.

Private Sale White Paper & Token Issuance

A private sale is a pre-public allocation of tokens to selected investors (typically VCs, strategic partners). May qualify for the MiCA Article 4(2) exemption for qualified-investor-only offerings or fewer-than-150-persons-per-member-state offerings.

Proof of Reserves (PoR) Custody & Safeguarding

Proof of Reserves is a cryptographic verification that a CASP's on-chain holdings match its liabilities to clients. Typically uses Merkle-tree commitments enabling each client to verify their balance is included in the total. Industry practice post-FTX; MiCA Article 75 reconciliation requirements work alongside.

Proof of Stake (PoS) DeFi & Crypto Technical

Proof of Stake replaces PoW computational competition with economic stake. Validators lock up (stake) crypto-assets and earn rewards for validating transactions correctly. Misbehaviour is penalised by stake forfeiture (slashing). Used by Ethereum (post-Merge 2022), Solana, Cardano.

Proof of Work (PoW) DeFi & Crypto Technical

Proof of Work requires miners to compete computationally to solve cryptographic puzzles, earning the right to add blocks and receive rewards. High energy consumption is the principal criticism. Used by Bitcoin (and a smaller set of remaining PoW chains).

Public Key Custody & Safeguarding

A public key is the cryptographic counterpart to a private key. Derives the wallet address. Safe to share publicly; used by senders to direct transfers to the address. The private key authorises spending; the public key only allows receiving.

Public Sale White Paper & Token Issuance

A public sale is the phase of a token sale open to general investors. Triggers MiCA Title II white-paper requirements unless an Article 4(2) exemption applies. The home NCA receives the white-paper notification at least 20 working days before the sale opens.

Pump and Dump Market Abuse (MiCA Title VI)

Pump-and-dump schemes involve coordinated buying and promotion to inflate a crypto-asset price, followed by rapid sale at the peak by the schemers. Common with low-liquidity tokens. Prohibited under MiCA Article 91; also typically involves dissemination of false information.

Qualifying Holding MiCA Defined Terms

A qualifying holding is any direct or indirect holding in a CASP that represents 10% or more of the capital or voting rights, or makes it possible to exercise a significant influence. Acquisitions crossing the 10%, 20%, 30%, or 50% thresholds trigger MiCA Article 83 notification requirements.

MiCA Article 3(1)(29); Article 83 ↗

Reception and Transmission of Orders MiCA Defined Terms

Per MiCA Article 3(1)(22), this involves receiving from a client an order to buy or sell one or more crypto-assets and transmitting that order to a third party for execution. A Class 1 CASP service that overlaps with brokerage.

MiCA Article 3(1)(22) ↗

Reference Asset Stablecoins (ART / EMT)

The reference asset is what an ART or EMT references for its stable-value claim. For EMTs, the reference asset is a single official currency. For ARTs, the reference asset can be one or more currencies, commodities, or other assets in a basket.

Regulatory Technical Standards (RTS) Process & Authorisation

RTS are EU delegated acts that specify the technical detail of how MiCA primary rules apply. Drafted by ESMA or EBA, adopted by the European Commission. Examples: ESMA RTS on white paper content (2025), EBA RTS on ART reserves (2025), ESMA RTS on safeguarding (2025).

Reserve Asset Stablecoins (ART / EMT)

Reserve assets are the individual instruments held in the ART asset reserve or the EMT reserves. EMT reserves are limited to commercial-bank and central-bank money; ART reserves accept a broader universe subject to EBA RTS concentration and quality limits.

MiCA Article 38; EBA RTS ↗

Reserve Custodian Stablecoins (ART / EMT)

Reserve custodians hold the assets backing outstanding ARTs/EMTs. Must be an independent credit institution or qualifying CASP. The custody arrangement produces bankruptcy-remoteness from the issuer's insolvency estate. Concentration limits prevent reliance on a single custodian.

MiCA Article 37; EBA RTS ↗

Reverse Solicitation Cross-Border & Passport

Reverse solicitation under MiCA Article 61 permits a third-country firm to provide services to an EU client where the client initiated the relationship without solicitation by the firm. Narrowly applied; any subsequent solicitation or marketing brings the relationship within MiCA scope.

MiCA Article 61 ↗

Rollup DeFi & Crypto Technical

A rollup is a Layer 2 scaling solution that batches transactions off-chain (or in a sub-chain) before settling them on Layer 1. Two main types: optimistic rollups (Optimism, Arbitrum) and zero-knowledge rollups (zkSync, StarkNet). Reduce gas costs and increase throughput.

Sanctions Screening AML & Travel Rule

Sanctions screening verifies customer and transaction-counterparty identity against EU, UN, OFAC, and other relevant sanctions lists. Required for all CASP transactions and customer onboarding. Specific sanctions-compliance regimes apply for transactions involving sanctioned jurisdictions.

Second Electronic Money Directive (EMD2) Stablecoins (ART / EMT)

EMD2 (Directive 2009/110/EC) is the EU framework for electronic money. Sets rules for EMI authorisation, prudential capital (initial EUR 350k + 2% of average outstanding e-money), and consumer protection. MiCA Title IV applies EMD2 to crypto-asset issuance.

Directive 2009/110/EC ↗

Securities and Commodities Authority (UAE) (SCA) Non-EU Regulators

The SCA is the federal UAE securities and commodities regulator. Supervises virtual asset service providers at the federal level — distinct from VARA (Dubai), DFSA (DIFC), and FSRA (ADGM). The UAE's virtual-asset regulatory map is multi-layered by emirate and free zone.

Securities and Exchange Commission (US) (SEC) Non-EU Regulators

The SEC supervises securities markets in the United States. The 2024-2026 regulatory direction has clarified that many crypto-assets fall within securities classification under the Howey test, triggering registration and disclosure obligations. The SEC v Coinbase, SEC v Binance cases shape the boundary.

Securities and Futures Commission (Hong Kong) (SFC) Non-EU Regulators

The SFC is Hong Kong's securities and futures regulator. Hong Kong's VASP regime under Cap. 615 AMLO covers VATP (Virtual Asset Trading Platform) licensing — substantive licensing for exchanges with retail access permitted under conditions. Strict but accessible substance.

Security Token Offering (STO) White Paper & Token Issuance

An STO is a token sale where the token is a financial instrument under MiFID II — typically a tokenised security. Falls under the Prospectus Regulation (EU) 2017/1129, not MiCA. May qualify for the DLT Pilot Regime if traded on a DLT-MTF.

Seed Phrase Custody & Safeguarding

A seed phrase (or recovery phrase) is a sequence of 12 or 24 dictionary words that encodes a private key. BIP-39 standard. Losing the seed phrase loses access to the wallet permanently; sharing it transfers control. Used for self-hosted wallet backup.

Segregation Custody & Safeguarding

Segregation under MiCA Article 75 requires CASPs to hold client crypto-assets in wallets, addresses, or accounts separate from the CASP's own assets. Two structures: individual segregation (one wallet per client) or omnibus segregation (pooled with internal ledger).

MiCA Article 75 ↗

Self-Hosted Wallet AML & Travel Rule

A self-hosted wallet (also called non-custodial or unhosted) is one where the user holds the private keys directly rather than entrusting them to a CASP. The TFR sets specific data-collection rules for transfers between CASPs and self-hosted wallets above EUR 1,000.

Servicio Ejecutivo de la Comisión de Prevención del Blanqueo de Capitales (Spain) (SEPBLAC) EU Regulators & Authorities

SEPBLAC is the Spanish AML supervisor, responsible for receiving suspicious-transaction reports and supervising AML compliance for obliged entities including CASPs. Has historically applied stricter expectations than several other EU AML supervisors.

Significant Asset-Referenced Token Stablecoins (ART / EMT)

A significant ART is one designated by the EBA based on customer base, transaction volume, market capitalisation, interconnections with the financial system, and cross-border issuance scale. Triggers direct EBA supervision via a supervisory college and stricter capital, liquidity, and reporting requirements.

MiCA Article 43 ↗

Significant E-money Token Stablecoins (ART / EMT)

A significant EMT is designated by the EBA based on user count (10M+), outstanding amount (EUR 5B+), and cross-border use (7+ member states). Direct EBA supervision via supervisory college, higher capital, additional liquidity buffers, enhanced reporting.

MiCA Article 56 ↗

Simplified Due Diligence (SDD) AML & Travel Rule

SDD is the lightest CDD level applicable to low-risk customer categories — typically regulated financial institutions, listed companies, certain public authorities. Available only where specific low-risk criteria are met; not a default option for retail customers.

Sixth Anti-Money Laundering Directive (AMLD6) AML & Travel Rule

AMLD6 (Directive (EU) 2024/1640) is the national-infrastructure piece of the EU AML package. Requires member states to upgrade FIU capabilities, interconnect beneficial-ownership registers, and align administrative cooperation. Transposition deadline 10 July 2027.

Directive (EU) 2024/1640

Smart Contract DeFi & Crypto Technical

A smart contract is computer code deployed on a blockchain that executes automatically when specific conditions are met. The technical primitive of DeFi protocols, NFTs, tokenisation, and most non-payment crypto-asset use cases. Different jurisdictions treat smart contracts differently for legal-enforceability purposes.

Spoofing Market Abuse (MiCA Title VI)

Spoofing is placing buy or sell orders with no intent to execute them, designed to create false impressions of supply or demand that influence other participants. Falls within MiCA Article 91 market manipulation. Detected through order-book pattern analysis.

Stress Testing for Reserves Stablecoins (ART / EMT)

Stress testing applies extreme but plausible scenarios to the reserve composition and redemption flow — major market dislocations, currency crises, run scenarios. Significant ART/EMT issuers test quarterly; results inform supervisory dialogue and capital adequacy.

Sub-Custody Custody & Safeguarding

Sub-custody is delegation of client crypto-asset custody to a third-party custodian. Permitted under MiCA Article 75 where the sub-custodian is itself authorised (MiCA CASP, CRR credit institution, or non-EU equivalent). The original CASP retains primary liability to clients.

MiCA Article 75(8) ↗

Subsidiary Undertaking MiCA Defined Terms

A subsidiary is an undertaking controlled by a parent within the meaning of Directive 2013/34/EU. Subsidiaries of credit institutions may benefit from MiCA Article 60 notification where the parent is authorised under the CRR.

MiCA Article 3(1)(31) ↗

Supervisory College Process & Authorisation

A supervisory college is a formal multi-authority coordination forum chaired by the home NCA (or ESMA/EBA for significant entities) bringing together host NCAs and relevant EU agencies. Quarterly meetings; joint supervisory data review; coordinated host engagement. Triggered by significant-CASP, ART, or EMT designation.

MiCA Articles 43, 56, 85 ↗

Supervisory Cooperation Cross-Border & Passport

Supervisory cooperation includes intra-EU NCA cooperation under ESMA convergence, bilateral memoranda with non-EU regulators (FCA, FINMA, SFC, MAS, etc.), and information-sharing for cross-border investigations. Underpins effective supervision of cross-border crypto-asset business.

Suspicious Activity Report (SAR) AML & Travel Rule

SAR is the US terminology for the AML report; STR is the EU equivalent. Both are mandatory filings to the relevant FIU when transactions raise AML concerns. US SARs go to FinCEN; UK SARs go to NCA; EU STRs go to the home-state FIU.

Suspicious Transaction Report (STR) AML & Travel Rule

An STR is the formal report obliged entities file to the national FIU when a transaction or customer behaviour raises money-laundering or terrorism-financing concerns. Filing is mandatory; failure to file is a substantive AML breach. Confidentiality requirements protect the entity from tipping-off concerns.

Swiss Financial Market Supervisory Authority (FINMA) Non-EU Regulators

FINMA is the Swiss financial regulator. Switzerland's crypto-asset framework operates outside MiCA via the 2021 DLT Act, the AMLA SRO regime for AML supervision, and the proposed crypto-institution licence (expected 2026-2027). Strong reputational signal but no EU passport.

Third-Country Firm Cross-Border & Passport

A third-country firm is a non-EU CASP. Cannot serve EU clients via direct outbound marketing — MiCA generally requires EU authorisation. Reverse solicitation (where the EU client initiates the contact) is the principal exception, narrowly applied per Article 61.

MiCA Article 61 ↗

Token Generation Event (TGE) White Paper & Token Issuance

A TGE is the technical event when crypto-asset tokens are minted on a blockchain for the first time. Often coincides with the public token sale launch. The TGE date is significant for vesting schedules, lock-up periods, and tax treatment in many jurisdictions.

Token Sale White Paper & Token Issuance

A token sale is the primary distribution of crypto-assets to investors or users. MiCA Title II applies to utility/generic token sales; Title III to ART issuance; Title IV to EMT issuance. Each route has its own white-paper and notification requirements.

Tokenomics White Paper & Token Issuance

Tokenomics covers the economic design of a crypto-asset: total supply, distribution mechanism, vesting schedules, utility within the protocol, incentive structures (staking rewards, fee distribution), and any burn mechanisms. Material disclosure component of the MiCA white paper.

Total Supply White Paper & Token Issuance

Total supply is the total number of tokens that exist at a given moment — includes circulating supply plus tokens in vesting contracts, reserves, locked allocations. Different from maximum (cap) supply, which is the lifetime ceiling.

Trading Platform for Crypto-Assets MiCA Defined Terms

Per MiCA Article 3(1)(18), a trading platform for crypto-assets is a multilateral system operated or managed by a CASP that brings together multiple third-party buying and selling interests in crypto-assets in a way that results in a contract. Operating a trading platform is a Class 3 CASP service.

MiCA Article 3(1)(18) ↗

Transfer of Funds Regulation (TFR) AML & Travel Rule

The TFR is the EU regulation implementing the FATF Travel Rule for crypto-asset transfers. Applies from 30 December 2024 alongside MiCA. Requires originator and beneficiary identification on transfers between CASPs; specific rules for self-hosted-wallet transfers above EUR 1,000.

Regulation (EU) 2023/1113 ↗

Transfer Service for Crypto-Assets MiCA Defined Terms

Transfer of crypto-assets is a CASP service under MiCA Article 3(1)(26): the service of transferring crypto-assets on behalf of a client from one DLT address or account to another. Subject to TFR Travel Rule data requirements where the transfer involves another CASP or a self-hosted wallet.

MiCA Article 3(1)(26); TFR Regulation (EU) 2023/1113 ↗

Transitional Regime Process & Authorisation

MiCA Article 143 allowed member states to set a transitional regime up to 18 months for pre-MiCA crypto-asset service providers to apply for authorisation. Deadlines varied: France/Cyprus closed Feb 2026; Germany/Italy closed end-2025; Spain/Portugal closed late 2025; others varied.

MiCA Article 143 ↗

Travel Rule AML & Travel Rule

The Travel Rule (from FATF Recommendation 16) requires originator and beneficiary information to accompany crypto-asset transfers between CASPs. EU implementation is the TFR (Regulation (EU) 2023/1113) applying from 30 December 2024. Triggered for any transfer above zero between CASPs; self-hosted-wallet thresholds vary.

TFR Regulation (EU) 2023/1113; FATF Recommendation 16 ↗

Travel Rule Threshold AML & Travel Rule

EU Travel Rule thresholds: between CASPs, full information accompanies every transfer (no value threshold); between CASP and self-hosted wallet, full Travel Rule data applies for transfers above EUR 1,000. Below EUR 1,000 self-hosted transfers require simplified data.

TFR Regulation (EU) 2023/1113 ↗

Ultimate Beneficial Owner (UBO) AML & Travel Rule

UBO is the natural person who ultimately owns or controls a customer through a chain of intermediate entities. Where the ownership chain has multiple layers, the UBO is identified by tracing through each layer until a natural person controlling 25%+ is found.

Unhosted Wallet AML & Travel Rule

"Unhosted wallet" is the term used in EU and FATF documents for what the industry typically calls a self-hosted or non-custodial wallet. The user controls the private keys directly. Same regulatory implications as self-hosted under TFR and AMLR.

Unlawful Disclosure Market Abuse (MiCA Title VI)

Unlawful disclosure of inside information is prohibited under MiCA Article 90 — disclosing inside information to any other person except where the disclosure is made in the normal exercise of employment, profession, or duties. Even unintentional disclosure can breach.

MiCA Article 90 ↗

Utility Token MiCA Defined Terms

A utility token is a type of crypto-asset that is only intended to provide access to a good or service supplied by its issuer. MiCA Title II governs the public offering of utility tokens — requiring a white paper but lighter than the ART or EMT regime. Tokens marketed as "utility" but with investment characteristics may fall under MiFID II as securities.

MiCA Article 3(1)(9) ↗

Validator DeFi & Crypto Technical

A validator is a node operator on a Proof of Stake blockchain who stakes crypto-assets to validate transactions and propose blocks. Validators earn staking rewards and face slashing for misbehaviour. Running a validator may itself fall within MiCA staking-as-a-service scope if operated commercially.

Vesting Schedule White Paper & Token Issuance

A vesting schedule defines how locked-up tokens are released over time — typically monthly or quarterly cliff-and-vesting structures over 1-4 years. Required disclosure in the MiCA white paper. Affects circulating supply and market dynamics post-TGE.

Virtual Assets Regulatory Authority (Dubai) (VARA) Non-EU Regulators

VARA is the dedicated virtual-asset regulator for the Emirate of Dubai (excluding the DIFC, which uses DFSA). Establishes the Dubai VASP licensing regime for crypto-asset businesses operating in or from Dubai. Covers exchanges, custody, broker-dealer, advisory, lending services.

Wallet (Custodial / Non-Custodial) DeFi & Crypto Technical

A custodial wallet means a CASP holds the private keys on behalf of the user — under MiCA Article 75 safeguarding rules. A non-custodial (self-hosted) wallet means the user holds the keys directly — MetaMask, Trust Wallet, hardware wallets. The custody distinction drives the regulatory scope.

Warm Wallet Custody & Safeguarding

Warm wallets sit between hot and cold storage. Online but with additional security controls (multi-sig requirements, time delays, withdrawal limits). Used as withdrawal buffer to refill hot wallets from cold storage.

Wash Trading Market Abuse (MiCA Title VI)

Wash trading is the practice of buying and selling the same crypto-asset between accounts under common control to create the false appearance of trading volume. Prohibited under MiCA Article 91 market-manipulation framework. Frequently detected through surveillance pattern recognition.

White Paper Notification Process & Authorisation

White paper notification is the procedure for submitting a crypto-asset white paper to the home NCA at least 20 working days before a public offering (Title II) or seeking admission to trading. NCAs may object during the window; do not formally approve content. ART/EMT white papers under Title III/IV require approval.

MiCA Article 8 (Title II) ↗

Wrapped Token DeFi & Crypto Technical

A wrapped token is a tokenised representation of one asset on a different blockchain. Examples: wBTC (Bitcoin on Ethereum), stETH (staked ETH derivatives). The wrapping entity custodies the underlying asset; MiCA scope depends on the wrapper's structure and stability characteristics.

Yield Farming DeFi & Crypto Technical

Yield farming is the practice of moving crypto-assets between DeFi protocols to maximise returns through liquidity provision, lending, staking, and incentive distributions. Activities often combine multiple protocols. Subject to smart-contract risk and yield-token volatility.

Zero-Knowledge Proof (ZK) DeFi & Crypto Technical

A zero-knowledge proof allows one party to prove to another that a statement is true without revealing any information beyond the validity itself. Used in ZK-rollups for scaling, privacy coins, and emerging compliance use cases (proof of solvency, proof of credentials).