Non-EU CASPs serving EU residents face DAC8 obligations regardless of where they're established. This article explains when and how these requirements apply.
If you have any EU customers, DAC8 likely applies to you. Non-compliance can result in fines up to EUR 200,000 and potential market exclusion.
When DAC8 Applies to Non-EU CASPs
DAC8 applies when a non-EU CASP:
- Actively markets to EU residents
- Has EU residents as customers
- Facilitates transactions for EU residents
Registration Obligations
Non-EU CASPs must:
- Register in one EU member state
- Appoint local representative if required
- Accept EU jurisdiction for DAC8 matters
Compliance Requirements
Same as EU-based CASPs:
- Full due diligence on EU users
- Complete transaction reporting
- TIN validation
- Record keeping
Enforcement Risks
Non-compliant non-EU CASPs face:
- Fines collectible through international mechanisms
- Prohibition from EU markets
- Banking partner pressure
- Reputational damage
Strategic Options
Option 1: Full Compliance
Register and comply with all DAC8 requirements. This is the recommended approach for CASPs with significant EU customer bases.
Option 2: Exit EU Market
Block EU residents from services. This requires robust geofencing and customer screening.
Option 3: EU Establishment
Create EU subsidiary with MiCA authorization. This provides the most robust market access but requires significant investment.
Conclusion
Non-EU CASPs must carefully evaluate their EU exposure and develop appropriate compliance or market strategies.
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