Fit-and-Proper Requirements for CASP Directors and Shareholders

Regulatory authorisation is never just about the entity applying; it is equally about the people behind it. MiCA requires that members of the management body of a Crypto-Asset Service Provider, as well as shareholders or members with qualifying holdings, meet fit-and-proper standards before authorisation is granted.

What “Fit and Proper” Covers

CySEC assesses the good repute, honesty and integrity of directors and qualifying shareholders, alongside their knowledge, skills and experience relevant to the role they will perform. Directors must collectively possess sufficient understanding of the CASP’s activities, including the specific risks associated with crypto-assets, custody arrangements and market abuse.

Time Commitment and Conflicts

Directors are also expected to be able to commit sufficient time to their role, and CySEC will scrutinise other directorships or professional commitments that could create conflicts of interest or limit a director’s ability to properly oversee the firm. Diversity of skills across the management body, rather than a single dominant individual, is generally viewed favourably.

Shareholder Scrutiny

Qualifying shareholders are assessed for the soundness of their financial position and the transparency of the ownership structure behind them, including ultimate beneficial owners in more complex group structures. Source of funds and source of wealth documentation is typically required as part of this assessment.

Preparing Strong Candidates

Applicants benefit from assembling a management team with a genuine, demonstrable mix of financial services, compliance and crypto-specific experience well before submitting an application, and from preparing clear, well-evidenced CVs and declarations rather than treating this as a formality.

Enalian advises crypto-asset businesses, investment firms and payment institutions on MiCA authorisation, notification and ongoing compliance in Cyprus. If you are planning a CASP application or reviewing your regulatory status, our team can guide you through the process. Get in touch with our team to discuss your specific circumstances.

This article is provided for general informational purposes only and does not constitute legal, tax or regulatory advice. Regulatory requirements are subject to change; readers should seek specific advice on their circumstances before taking action.