A CASP license for crypto market makers is not always required. Under MiCA, the main question is not whether a company calls itself a market maker. The real question is whether the company provides a regulated crypto-asset service to clients in the EU.
This distinction is important because MiCA does not list “market making” as a separate licensed service. A firm may provide liquidity and still fall outside the CASP perimeter. But the same firm may need authorisation if it deals directly with clients, executes their orders, holds their assets, or operates a trading platform.
In simple terms, the license depends on the business model, not on the label.
When a crypto market maker may not need a CASP license
A market maker may not need CASP authorisation if it trades only on its own account.
This usually means the firm uses its own capital, places orders on third-party exchanges, does not onboard clients, does not hold client funds or crypto-assets, and does not execute orders for anyone else.
For example, a company that posts buy and sell orders on a crypto exchange using its own money may simply be doing proprietary trading. It provides liquidity to the market, but it does not provide a service to a specific client.
In this situation, the activity may fall outside the CASP licensing perimeter.
However, this exemption is narrow. Many firms start with proprietary trading but later add direct client services. Once clients are involved, the regulatory position can change.
When a market maker usually needs CASP authorisation
A CASP license is usually required when the market maker provides services to clients.
This often happens in OTC and RFQ models. If a client asks for a quote, the firm gives a price, the client accepts it, and the firm buys or sells crypto-assets as counterparty, this is no longer just proprietary trading.
Under MiCA, this may be treated as exchange of crypto-assets for funds or exchange of crypto-assets for other crypto-assets. These are regulated crypto-asset services.
The same applies when a firm receives, routes, or executes client orders. In that case, it may be providing execution of orders or reception and transmission of orders, both of which are also regulated under MiCA.
A market maker may also need authorisation if it holds client crypto-assets, supports settlement, provides transfer services, or operates its own trading platform.
The key point is simple: trading with your own capital does not automatically mean you are outside regulation. If the transaction is client-facing, CASP rules may apply.
OTC market makers: the main risk area
OTC market makers should be especially careful.
Many OTC desks describe their activity as liquidity provision. But if they quote prices directly to clients and enter into trades with them, the regulator may see this as a crypto exchange service.
The important questions are:
- Who is the client?
- Who provides the quote?
- Who is the counterparty?
- Whose capital is used?
- Who receives the funds or crypto-assets?
- Who settles the transaction?
If the answers show that the firm is providing a service to a client, CASP authorisation is likely required.
Operating a trading platform
If a market maker also operates the platform where trading takes place, the situation becomes more complex.
Operation of a trading platform is a separate crypto-asset service under MiCA. It also has a higher capital requirement.
There are additional conflict-of-interest issues if the platform operator trades on its own venue. A firm cannot simply run an order book and act as its own internal market maker without addressing these regulatory concerns.
This model needs careful structuring before launch.
Reverse solicitation is not a safe business model
Non-EU market makers sometimes try to rely on reverse solicitation to serve EU clients without a license.
This is risky.
Reverse solicitation only applies where the client approaches the firm entirely on their own initiative. It cannot be used as a way to actively target the EU market.
If a firm markets to EU clients, uses EU-facing sales channels, attends EU events, runs campaigns, or builds a regular EU client base, reverse solicitation is unlikely to protect it.
For a serious EU strategy, proper CASP authorisation is usually the safer route.
Capital requirements
If a market maker needs a CASP license, the minimum capital depends on the services it provides.
- Class 1 requires EUR 50,000. This may apply to firms that only execute or transmit client orders.
- Class 2 requires EUR 125,000. This is the class most OTC and principal market makers fall into, because they exchange crypto-assets for funds or other crypto-assets with clients.
- Class 3 requires EUR 150,000. This applies when the firm also operates a trading platform.
These amounts are only the minimum floor. A CASP must hold the higher of the fixed minimum capital or one quarter of the previous year’s fixed overheads. For active trading firms with high operating costs, the real capital requirement may be higher than the basic minimum.
Ongoing obligations
A CASP license is not just a permission to start operating. It also creates ongoing obligations.
Authorised firms must follow conduct rules, manage conflicts of interest, protect client assets where relevant, handle complaints properly, and maintain strong governance.
Market makers also need systems to detect and prevent market abuse, including manipulation and suspicious trading activity.
In addition, CASPs fall under DORA, which means they must manage technology risks, cybersecurity, incidents, outsourcing, and operational resilience.
AML, KYC, sanctions screening, and Travel Rule procedures are also part of the compliance framework.
CASP authorisation in the Czech Republic
In the Czech Republic, CASP authorisation is handled by the Czech National Bank. AML supervision remains with the FAÚ.
The Czech transitional regime for older crypto providers has already ended. New firms can no longer rely on the previous trade licence model if their activity falls under MiCA.
This means that a crypto market maker entering the Czech or wider EU market today must first check whether its services are regulated. If they are, the firm needs full CASP authorisation before providing them.
Conclusion
Crypto market makers do not always need a CASP license. But many of them do.
A firm that only trades with its own capital on third-party exchanges, without clients and without client assets, may fall outside the CASP perimeter.
A firm that provides OTC quotes, deals directly with clients, executes orders, holds assets, or operates a trading platform is much more likely to need authorisation.
The safest approach is to analyse the business model before launching in the EU. The company should map every trading flow, identify whether clients are involved, define the exact MiCA services, and check the correct capital class.
For market makers, the difference between proprietary trading and client-facing crypto services is the key factor. Getting this classification right at the beginning can prevent licensing problems, delays, and regulatory risk later.
FAQ
Do all crypto market makers need a CASP license?
No. A firm that only trades on its own account, using its own capital and without client relationships, may not need CASP authorisation for that activity.
When does a market maker need a CASP license?
A license is usually needed when the firm deals directly with clients, provides OTC exchange, executes client orders, holds client assets, or operates a trading platform.
Which CASP class usually applies to OTC market makers?
Most OTC and principal market makers fall into Class 2, with a minimum capital requirement of EUR 125,000, or one quarter of fixed overheads if that amount is higher.
Can a non-EU market maker use reverse solicitation?
Only in very limited cases. Reverse solicitation cannot be used as a regular strategy to target or serve EU clients.
Who supervises CASP licenses in the Czech Republic?
The Czech National Bank supervises CASP authorisation in the Czech Republic. The FAÚ remains responsible for AML supervision.
