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Freedom251 › Blog › CASP authorization

MiCA authorization vs. passporting: what EU crypto exchange customers should know

By Freedom251 Team · · 10 min read

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Authorization is the permission; passporting is the cross-border route for the services covered by that permission. Under the Markets in Crypto-Assets Regulation (MiCA), a provider must first have a lawful basis to offer a particular crypto-asset service. An authorized crypto-asset service provider (CASP) can then extend those authorized services to customers in other EU Member States by making a cross-border notification through its home-state authority.

Grandfathering was different. A national registration or temporary transition status did not create a MiCA authorization or an EU passport. ESMA says the EU-wide transitional period expired on 1 July 2026; after that date, a provider without the required MiCA authorization could not rely on legacy status to continue covered services.

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The short answer: two connected legal steps, not two names for the same thing

MiCA separates the right to provide a crypto-asset service from the procedure for providing that service across borders. Authorization is granted to a specific legal person for specified services. Passporting is the mechanism that lets that authorized provider use the authorization throughout the Union, either by establishing in another Member State or by providing services from its home state.

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This distinction matters because a website can be accessible in another country without proving that the operator is authorized there. A local registration, an old national license, or a marketing statement is not evidence by itself of a current MiCA authorization or a completed cross-border notification.

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The governing regulation is Regulation (EU) 2023/1114. MiCA was published in the Official Journal on 9 June 2023. Its authorization, passporting, conduct and transitional rules should be read together rather than treated as one “EU license” label.

What MiCA authorization actually covers

A permission for a legal entity

MiCA generally prohibits a person from providing covered crypto-asset services in the Union unless it is authorized under Article 63 or qualifies under one of the regulated-entity routes listed in Article 60. The authorization belongs to the particular legal entity named in the decision, not automatically to every company in a corporate group or to every brand using the same platform.

Article 59 is the starting point for CASP authorization. ESMA’s interactive rulebook describes the authorization framework and the information a competent authority assesses: MiCA Article 59: Authorisation. The full regulation is available from EUR-Lex.

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A permission for listed services

Authorization is also service-specific. The authority identifies which crypto-asset services the provider may perform. A firm authorized for one category cannot assume that the same approval covers custody, exchange, execution, advice, portfolio management, transfer services or another category unless that service is included in its authorization or is available through an applicable Article 60 route.

For customers, the practical question is therefore not simply “Is this platform MiCA-authorized?” It is “Which legal entity is contracting with me, which services has that entity been authorized to provide, and do those services match what I am using?”

Other regulated-entity routes

MiCA Article 60 permits certain other regulated entity types to provide specified crypto-asset services under their existing regulatory framework and the conditions in that article. Consequently, a lawful provider does not necessarily hold a CASP authorization under Article 63. The relevant legal basis and the services covered still need to be identified.

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What passporting adds

Union-wide reach without a separate physical office in every country

Once a CASP is authorized for particular services, Article 59(7) provides the cross-border principle:

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“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.”

The quotation is from Regulation (EU) 2023/1114. In plain language, the provider can serve customers in other Member States without obtaining a fresh, full authorization in each host state. It may establish there, including through a branch, or provide the service cross-border from its existing establishment.

Passporting does not enlarge the underlying authorization. It carries the authorized services across the Union; it does not silently add a new service, a new legal entity, or permission to ignore MiCA’s conduct and disclosure rules.

The notification is part of the route

Passporting is not activated merely because an authorization decision has been issued. A CASP planning to provide services in other Member States must notify its home-state competent authority. The notification identifies the intended host states, the services to be provided, the planned start date and other activities relevant under MiCA.

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Article 65 sets the communication timetable. After receiving a complete notification, the home authority communicates the information to the relevant host-state contact points, the European Securities and Markets Authority (ESMA) and the European Banking Authority (EBA) within 10 working days. The provider may begin the cross-border activity when it receives that communication, or at the latest on the 15th calendar day after submitting the notification, subject to the regulation’s conditions. The text is available at MiCA Article 65 on EUR-Lex.

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How the process looks for a customer

  1. Home-state authorization: The provider receives authorization for a named legal entity and specified crypto-asset services, or establishes that an Article 60 route applies.
  2. Cross-border plan: The provider decides which Member States it will serve and which authorized services it will offer there.
  3. Notification: It sends the host-state list, service list, intended start date and other required information to its home authority.
  4. Regulatory communication: The home authority forwards the notification to host-state contact points, ESMA and EBA within 10 working days.
  5. Start of service: The provider starts after receiving the communication or, at the latest, on the 15th calendar day after submitting the notification, according to Article 65.

A notification is therefore evidence of the cross-border route for the services identified in it. It is not a substitute for the underlying authorization.

Grandfathering was not a MiCA passport

What the transition allowed

MiCA included temporary arrangements for entities that were already providing crypto-asset services under applicable national law before 30 December 2024. During a Member State’s permitted transition, such an entity could continue under the conditions and limits of the relevant national regime while seeking MiCA authorization or preparing to stop.

That status did not turn the entity into a CASP authorized under MiCA. ESMA’s Q&A 2086 states the point directly: “Grandfathered entities do not benefit from an EU passport.” Cross-border activity during the transition depended on the national rules in both the home and destination states, not on MiCA passporting.

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Authorization, passporting and grandfathering compared

Question MiCA authorization MiCA passporting Legacy grandfathering
Legal basis Article 63 CASP authorization, or an applicable Article 60 route MiCA cross-border rights following authorization and an Article 65 notification Temporary national transition arrangements
Who is covered The specified legal entity The same authorized entity The entity relying on the relevant national permission
Services Only services identified in the authorization or applicable regulated-entity route Only the authorized services included in the notification Services allowed by the applicable national law
Geographic reach Permission in the authorizing state Union-wide establishment or freedom to provide services after notification No automatic EU reach; cross-border activity depended on national rules in both states
Status after 1 July 2026 Continues while authorization remains valid and obligations are met Continues for the authorized and notified services Cannot be used as a basis for continuing covered services without MiCA authorization

The transition deadline has passed

ESMA stated on 23 June 2026 that the EU-wide transitional period would end on 1 July 2026. Its statement says: “After this date, any entity providing crypto-asset services to EU clients without a MiCA licence will be in breach of EU law and must cease offering such services.”

As of 13 October 2026, that deadline has passed. A provider that was still operating under a national registration or transition status could not describe that status as a MiCA passport. If it had not obtained the required authorization, it had to stop the covered services and follow an orderly wind-down.

ESMA’s 17 April 2026 statement explains that wind-down arrangements can include prior notice to existing customers, offboarding, and transferring assets to an authorized CASP or to a self-hosted wallet, where appropriate. See ESMA’s statement on the end of transitional periods and wind-down.

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What customers should verify before relying on a “MiCA” claim

1. Identify the contracting legal entity

Read the account agreement, terms of service and regulatory disclosures for the exact company that holds your account. A trading name, app name or group parent may not be the entity that received authorization. Record the legal name, registered jurisdiction and the services it says it provides.

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2. Match the service to the authorization

Separate the activities you use: buying or selling crypto-assets, exchange, custody, transfer, execution, advice and portfolio management can fall into different service categories. Confirm that the provider’s authorization covers the activity you are performing, rather than assuming that one approved service covers the entire platform.

3. Distinguish authorization from notification

For service to customers in another Member State, look for evidence of the Article 65 notification route as well as the underlying authorization. The relevant host state, service scope and start date should be consistent with the provider’s disclosures. A claim that customers “can sign up” from a country is not proof that the notification was made.

4. Check the date and transition status

Any statement referring only to a national registration, “grandfathering,” or a transition period must be read against the 1 July 2026 deadline. After that date, those labels cannot justify continuing covered services without the required MiCA authorization.

5. Ask who holds assets and who provides each function

Platforms sometimes use separate entities for custody, brokerage, payments or technology. The entity authorized for one function may not be the entity performing another. Confirm the provider responsible for each service and the legal terms that apply to your assets and orders.

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What authorization does—and does not—promise

Conduct and disclosure duties

Authorization brings regulatory obligations, not a promise that an investment will make money or that a token will retain value. Article 66 requires that providers act in clients’ best interests:

“Crypto-asset service providers shall act honestly, fairly and professionally in accordance with the best interests of their clients and prospective clients.”

The same conduct framework requires clear and fair communications, risk warnings, and publication of pricing, costs and fees. The requirements are set out in Article 66 of Regulation (EU) 2023/1114.

What it does not promise

  • It does not guarantee a token’s price, liquidity or availability.
  • It does not eliminate technology, custody, fraud, market or counterparty risk.
  • It does not mean every product shown in an app is covered by the same authorization.
  • It does not make a provider immune from suspension, enforcement or loss.
  • It does not convert a former national registration into an EU passport.

Common situations and the correct interpretation

An authorized provider serves customers in several Member States

If the provider has authorization for the relevant services and has completed the Article 65 notification for the intended host states, this is the normal MiCA passporting model. Customers should still verify the legal entity and service scope because the passport follows those details.

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A provider was registered nationally before 30 December 2024

That fact describes a possible legacy status, not MiCA authorization. During the applicable transition, cross-border service depended on the laws of both states. After 1 July 2026, the expired transition cannot be used to continue covered services without authorization.

A platform is available through an EU app store or website

Technical availability does not establish regulatory permission. The operator may be serving a different customer segment, using a different legal entity, or failing to update access controls. Verify the legal and regulatory information rather than inferring status from the sign-up page.

A firm is authorized for custody but advertises trading

Authorization is service-specific. Ask whether trading is covered by the same entity and authorization, or whether another authorized entity performs it. Do not treat the custody authorization as a blanket approval for all activities.

If a provider lacks authorization after the deadline

ESMA’s Q&A 2220 explains that an entity providing services under applicable law before 30 December 2024 had to cease those services if it was not authorized as a CASP by the end of the transition applicable in the relevant Member State. The Q&A is available through ESMA’s MiCA questions and answers.

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For a customer who receives a wind-down notice or cannot confirm the provider’s authorization, practical steps are:

  1. Read the notice and deadlines: Identify the date on which trading, deposits, withdrawals or other services will stop.
  2. Stop adding exposure: Do not send additional funds until you understand which regulated entity will hold them and which services remain available.
  3. Export records: Save transaction history, balances, tax documents, fee statements and support correspondence.
  4. Arrange a transfer: Follow the provider’s process for moving assets to an authorized CASP or, where suitable and technically possible, to a self-hosted wallet.
  5. Check destination details: Confirm network, address and identity requirements before approving a transfer; irreversible blockchain transactions cannot normally be corrected.
  6. Escalate unresolved issues: Use the provider’s complaints channel and contact the relevant national competent authority if assets or required notices are not handled as promised.

A concise customer decision framework

If you can establish… What it means What remains to check
MiCA authorization for the exact legal entity and service The provider has the underlying permission for that activity Whether your Member State is covered by a completed notification when service is cross-border
Authorization and Article 65 notification The provider can use MiCA’s Union-wide route for the notified service Conduct disclosures, fees, risks and the entity actually holding your assets
Only a national registration or grandfathering statement It may have described a temporary legacy position Whether MiCA authorization was granted before the applicable transition ended; after 1 July 2026, legacy status alone is insufficient
Only a website claim or local availability No regulatory conclusion can be drawn Legal entity, authorization basis, service scope, notification and current date

Bottom line for EU exchange customers

Think of MiCA authorization as the permission and passporting as the cross-border route. The permission belongs to a particular provider and covers specified services. The route requires the home authority’s notification to the intended host states and regulators. Grandfathering was a temporary national arrangement, never an EU passport, and the EU-wide transition ended on 1 July 2026. In 2026, a provider that cannot show a current MiCA authorization or another applicable Article 60 basis should not be assumed entitled to continue covered services merely because it was once registered nationally or remains accessible online.

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CASP authorizationcrypto exchangesEU crypto regulationgrandfatheringMiCApassporting

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