First distinguish which funds are spent and which funds must be continuously satisfied
Company formation, translation, legal and application service fees generally constitute project expenditure; salaries, audits, systems and channels constitute ongoing costs; regulatory capital or safeguards are a separate category of requirement. The three should be presented separately, and available operating cash must not be treated simply as the same budget as regulatory requirements, still less may client funds be counted as start-up capital freely usable by the company. Quotations should also state whether taxes and fees, supplementary submissions, business changes and post-failure service arrangements are included. For tools and channels charged by transaction volume, budgets may be presented for low business volume, expected business volume and stress scenarios; a one-off promotional price should not be treated directly as a fixed maintenance cost for future years.
Free registration only answers whether the government charges a registration fee
Both FinCEN and FINTRAC have official materials stating that the relevant MSB registration carries no registration fee. This conclusion does not cover fees charged by other competent authorities, nor does it exempt the personnel, policies and systems investment required for operations. Suppose a consultant quotes a very low price but is only responsible for filling in forms; the team must still establish client review, transaction monitoring and record-keeping capabilities itself. Therefore, the price of "completing the filing" should be separated from the budget for "being ready for ongoing operations," to avoid discovering only after obtaining the number that there are no compliance execution resources.
How the EU monetary thresholds enter the budget
Article 67 of MiCA requires CASPs to maintain prudential safeguards, in principle the higher of the minimum amount applicable by class of service and one quarter of the previous year's fixed expenses; where the business has operated for less than one year, the corresponding forecast is used. The fixed tiers listed in the AMF's official explanation are EUR 50,000, EUR 125,000 and EUR 150,000. Depending on the legal conditions, the safeguards may take the form of own funds, insurance or a comparable guarantee; the three tiers must not all be understood as cash deposits, nor should only the lowest tier be selected while ignoring the actual class of business.
A calculation example, not a market quotation
Assume a project falls within the EUR 125,000 tier and its annual fixed expenses calculated under the applicable rules are EUR 800,000; one quarter, i.e. EUR 200,000, is higher than the fixed tier. This merely demonstrates the comparison logic; how actual expense items are included, whether the safeguard form may be used, and how the calculation is made where other licences are also held all require specific verification. The budget should separately reserve the funds required by banks' or channels' commercial conditions and an operating buffer; it must not be assumed that once the minimum safeguard is met, other expenditures will resolve themselves.
Recommended actions
- Require quotations to separately set out one-off fees, annual fixed fees, volume-based fees and exclusions.
- Prepare a separate capital or safeguard calculation, stating the class of business, the expense basis and the source of funds.
- Check the ongoing operating budget against a conservative transaction volume, and do not double-count client funds or unusable safeguards as available cash.
Information note: This article provides general information only and does not replace legal advice based on specific facts.
References
- Enforcement actions for failure to register — FinCEN
- Register your MSB or FMSB — FINTRAC
- MiCA Article 67 — Prudential requirements — ESMA
- The European regulation Markets in Crypto-Assets — French AMF
- MiCA Article 70 — Safekeeping of client assets and funds — ESMA
