CASP -Custody & Administration
Specific CASP authorization for custody and administration of crypto-assets on behalf of clients, requiring written custody agreements, individual client position registers, and insolvency-protected asset segregation.
MiCA Article 3(17), Article 75
Capital Required
€125,000 (Class 2) + 25% quarterly fixed overheads
Timeline
3-6 months
Fees
Included in general CASP authorization (€3,000-100,000)
Regulatory Body
ESMA / National Competent Authorities (NCAs)
Legislative Framework
Markets in Crypto-Assets Regulation (MiCA) 2023/1114, Payment Services Directive 2 (PSD2), Digital Operational Resilience Act (DORA)
Last updated: June 2025
Key Requirements
Maintain minimum capital of €125,000 (Class 2) per MiCA Annex IV for custody service provision.
Establish written custody agreements with all clients detailing asset safeguarding responsibilities, liability limitations, and claims procedures per MiCA Article 75(2).
Implement individual client asset position registers and client-by-client reconciliation procedures conducted monthly with documented exceptions.
Maintain insolvency-protected asset segregation through wallets/custody solutions isolated from company operating accounts and insolvency estate.
Implement multi-signature wallet infrastructure or institutional custody with third-party independent safeguarding arrangement.
Establish documented key management and recovery procedures covering key storage, backup procedures, and disaster recovery contingencies.
Conduct annual third-party security audits (SOC 2 Type II or equivalent) covering custody infrastructure and access controls.
Implement comprehensive insurance coverage for digital asset custody with minimum limits covering typical client holdings.
Application Process
Prepare custody policy framework including client agreement templates, asset segregation procedures, and liability management approach.
Establish custody infrastructure with multi-signature wallets or institutional custody arrangement with independent verification.
Develop client position register system with automated reconciliation, exception reporting, and audit trails.
Submit CASP authorization application to NCA with focus on custody-specific capabilities and operational procedures.
Provide documentation of custody infrastructure, key management procedures, and third-party security assessment results.
Engage with NCA for review of custody safeguards, asset segregation implementation, and client protection arrangements.
Implement custody agreement templates and client onboarding procedures under NCA authorization.
Expected Total Timeline
3-6 months
Ongoing Obligations
After obtaining your CASP -Custody & Administration, these are the continuing compliance requirements you must maintain.
Maintain monthly client-by-client asset position reconciliation with documented procedures and exception reporting protocols.
Update custody agreements in line with regulatory changes and publish updates to existing clients within 30 days.
Conduct annual security audits of custody infrastructure and maintain insurance coverage continuously without lapse.
Report any custody-related incidents including key compromise, unauthorized access, or asset discrepancies to NCA within 24 hours.
Maintain segregation safeguards with regular testing of multi-signature procedures or institutional custody backup procedures.
Monitor and manage cyber insurance claims history and implement improvements identified in annual security assessments.
Provide NCA access to client position registers and reconciliation documentation upon request within 5 business days.
Cost Summary
Capital Requirement
€125,000 (Class 2) + 25% quarterly fixed overheads
Application & Licensing Fees
Included in general CASP authorization (€3,000-100,000)
Jurisdiction Setup Cost
$40,000-$120,000
Annual: $50,000-$150,000
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Need help with CASP -Custody & Administration?
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