MiCA Qualifying Holdings: Acquisitions in a CASP

The layer M&A counsel forget

MiCA’s prudential and conduct rules are visible. The capital floors, the white papers, the complaints handling, the safeguarding — every applicant runs into them in the authorisation file. The rules in The qualifying-holdings notification rule and qualifying-holdings assessment rule — qualifying holdings — sit a layer over the top, and typically come up later, when the CASP changes hands.

Until they bite, they are easy to skip. When they bite, they decide whether the deal closes on schedule, or at all.

What a qualifying holding is

Under MiCA’s qualifying-holdings notification rule, a qualifying holding in a CASP means:

• A direct or indirect holding of 10% or more of the CASP’s capital, or
• A direct or indirect holding of 10% or more of the voting rights, or
• A holding that allows the holder to exercise significant influence over the management of the CASP

The threshold catches direct and indirect holdings. A chain of holding companies where each direct stake stays under 10% but one ultimate beneficial owner concentrates above it triggers the rule — substance over form, as in the rest of EU financial-services law.

The notification rule

Anyone who proposes to acquire a qualifying holding, or to increase an existing holding so that it crosses 20%, 30%, or 50%, or to take any step that gives control, must notify the competent authority of the CASP in advance — before the acquisition takes effect.

The same rule runs in reverse. A proposed disposal that reduces a qualifying holding below those thresholds is also a notification event.

The notification is made by the proposed acquirer or disposer, not by the CASP itself.

What the regulator assesses

The competent authority then conducts an assessment. Under The qualifying-holdings assessment rule, the criteria are:

1. Reputation and suitability of the proposed acquirer — including any history of regulatory or criminal issues.
2. Reputation, knowledge, skills, and experience of those who will direct the CASP if the acquisition goes ahead.
3. Financial soundness of the proposed acquirer.
4. The CASP’s continuing ability to comply with MiCA requirements after the change.
5. AML/CFT integrity — reasonable grounds to suspect money laundering or terrorist financing in the acquisition would defeat the proposal.

The authority can approve, approve with conditions, or oppose. An acquisition completed against an authority’s opposition is voidable and subject to supervisory measures.

Why this is the M&A scoping question

For an acquirer planning to buy into a CASP, The qualifying-holdings notification rule is the binding calendar, not the contract. The deal cannot close until the assessment runs. Two consequences:

• Timing. Scheduling closing on the assumption that the regulator will be silent is wrong. The authority works to its statutory window, and may take it.
• Diligence. The regulator will look at the acquirer the way they look at any incoming controller of a regulated firm — source of funds, sanctions exposure, beneficial-owner transparency. Diligence the regulator will do should be done by counsel first.

For incumbent shareholders, the corresponding obligation is to anticipate these checkpoints in the shareholder agreement and the change-of-control mechanics — not to discover them at the notification stage.

How this fits the wider MiCA picture

Qualifying-holdings rules are a layer on top of, not a substitute for, the CASP’s own authorisation and ongoing compliance. The capital, conduct, custody, and complaints obligations that the crypto licensing pillar guide lays out run continuously. The qualifying-holdings notification rule is the rule that governs who can be a controller of the CASP. The two have to fit together — an acquirer that passes financial-soundness review but is structurally incapable of supporting the CASP’s prudential (Class-1, 2, or 3 capital) obligations fails the qualifying-holdings assessment continuing compliance prong.

Working with counsel on a CASP acquisition

The diagnostic for counsel: ask them to map the notification timeline against the deal calendar, identify every direct and indirect stake that approaches or crosses 10% (and 20% / 30% / 50%), and run the qualifying-holdings assessment criteria on the acquirer before the regulator does. Counsel that treats the qualifying-holdings notification rule as a post-signing administrative step has scoped the wrong deal. The firms in our index with crypto-M&A experience are listed below.