ChainChoice Crypto + EU Regulation Glossary

Markets in Crypto-Assets Regulation (EU) 2023/1114. The European Union's comprehensive crypto framework, applicable across all 27 member states from 30 December 2024. Crypto-asset service providers (CASPs) must hold authorisation in one member state to passport services across the EU + EEA.

Crypto-Asset Service Provider. Under MiCA, any legal entity providing one or more crypto-asset services (custody, trading, exchange, advice, portfolio management, etc.) to clients within the EU. CASPs require authorisation from a national competent authority.

The EU regulatory principle allowing a service provider authorised in one member state to provide its services across all other member states without separate authorisation. MiCA establishes passporting for CASPs across the full EU + EEA.

European Securities and Markets Authority. The EU-level regulator coordinating securities and crypto-asset supervision across national competent authorities. Maintains the public MiCA register of authorised CASPs.

Bundesanstalt für Finanzdienstleistungsaufsicht. Germany's national competent authority for financial supervision, including MiCA authorisation of crypto-asset service providers. Operates an 18-month transitional regime through 30 June 2026 for previously KWG-licensed crypto custodians.

Autorité des marchés financiers. France's national securities regulator and MiCA national competent authority. Operates a transition period through end-2025 for previously PSAN-registered crypto providers.

De Nederlandsche Bank, the Netherlands' central bank. It registered crypto firms before MiCA; under MiCA the AFM authorises them, and Bitvavo's authorisation is the AFM's.

Digital Operational Resilience Act (Regulation (EU) 2022/2554). Applies to MiCA-licensed CASPs from 17 January 2025. Imposes ICT risk management, incident reporting, and third-party-risk requirements.

Regulation (EU) 2023/1113. Requires CASPs to attach originator and beneficiary information to crypto-asset transfers of €1,000 or more. Fully enforced alongside MiCA from 30 December 2024.

5th Anti-Money Laundering Directive (EU) 2018/843, transposed into German Geldwäschegesetz (GwG). The pre-MiCA legal basis for crypto custody and exchange registration in Germany before MiCA application.

Know Your Customer. The identity-verification process CASPs perform on customers at onboarding (and periodically afterwards). MiCA-licensed CASPs implement risk-based KYC including identity documents, address verification, and source-of-funds checks for higher-risk profiles.

Anti-Money Laundering. The regulatory framework requiring financial firms to detect, prevent, and report money laundering. CASPs operate under MiCA-aligned AML obligations including KYC, transaction monitoring, suspicious activity reporting (SAR), and sanctions screening.

Suspicious Activity Report. The formal notification a CASP must file with the national Financial Intelligence Unit (FIU) when it identifies a transaction or pattern suggestive of money laundering, terrorism financing, or other financial crime.

Customer Due Diligence. The CASP's ongoing obligation to verify, monitor, and update customer identity information based on their risk profile. Higher-risk customers (Politically Exposed Persons, high transaction volumes) face Enhanced Due Diligence (EDD).

Politically Exposed Person. A person holding a prominent public function, or their close associate/family. CASPs apply Enhanced Due Diligence to PEPs and may require senior-management approval to onboard.

Source of Funds / Source of Wealth. The CASP's obligation to verify where a customer's deposited funds originated and (for high-net-worth profiles) the overall provenance of their wealth.

An editorial-integrity discipline where the ranking of providers is computed independently of any affiliate-commission data. ChainChoice enforces this architecturally via a CI ratchet (scripts/check-affiliate-blind.mjs) that fails the build on any violation.

A receipt whose identifier is a deterministic hash of its content. Identical inputs always produce identical receipt IDs. On ChainChoice the receipts printed on country, US-state and comparison pages are hashed, not signed: /r/<id> rebuilds the list and compares it with the hash. The Impressum and the affiliate disclosure are served with Ed25519-signed receipts over their exact text, which check against ChainChoice's published keys.

Centralised Exchange. A CASP operating an order book where users deposit funds, the venue custodies them, and trades match counterparty orders. Examples: Bitpanda, Bitvavo, Kraken, Coinbase. CEXs are CASPs and subject to MiCA.

Decentralised Exchange. A protocol allowing users to swap crypto-assets onchain without a custodial intermediary. Examples: Uniswap, Curve, PancakeSwap. Pure DEX protocols are typically outside MiCA scope; centralised front-ends (uniswap.org, etc.) may fall within MiCA scope.

A dedicated physical device storing cryptocurrency private keys in a secure-element chip, isolated from the user's phone or computer. Examples: Ledger, Trezor, Tangem, BitBox, Keystone, Coldcard. Hardware wallets are non-custodial and outside MiCA scope.

A wallet where a third-party (typically a CEX) holds the private keys on behalf of the user. The user accesses funds via account credentials. Custodial-wallet providers are CASPs and require MiCA authorisation in the EU.

A wallet where the user holds the private keys directly and signs transactions locally without any third party. Examples: MetaMask, Phantom, Rabby, hardware wallets. Non-custodial wallets are typically outside MiCA scope.

A crypto-asset designed to maintain a stable value relative to a reference (typically fiat currency or a basket). MiCA distinguishes asset-referenced tokens (ARTs) and e-money tokens (EMTs), each subject to specific MiCA Titles III + IV requirements.

Asset-Referenced Token under MiCA. A crypto-asset that aims to maintain stable value by referencing multiple fiat currencies, commodities, crypto-assets, or a basket. Subject to MiCA Title III requirements including authorisation, white paper, and reserve obligations.

E-Money Token under MiCA. A crypto-asset that aims to maintain stable value by referencing the value of one official currency. EMT issuers must be authorised credit institutions or e-money institutions and meet MiCA Title IV requirements.

The process of locking up crypto-assets (typically PoS-network tokens) to participate in network consensus and earn rewards. CASPs offering staking-as-a-service are subject to MiCA conduct rules.

A product where users deposit crypto-assets to be lent out in exchange for interest. MiCA does not regulate crypto lending itself; Nexo, for one, says its Earn and Borrow products sit outside MiCA and outside any deposit or investor protection scheme.

A service converting fiat currency (typically via SEPA, card, or instant payment) into crypto-assets. Onramp providers are CASPs under MiCA.

The inverse of onramp — converting crypto-assets back into fiat for withdrawal to a bank account. Subject to the same CASP obligations as onramps.

Bitcoin Improvement Proposal 39. The standard for generating mnemonic seed phrases (typically 24 words) from a cryptographic seed. All current mainstream hardware wallets implement BIP-39.

Bitcoin Improvement Proposal 85. A standard for deriving child seeds from a master seed, allowing one hardware wallet to manage multiple independent wallets.

A cryptographic scheme that splits a seed into N shares, requiring K of them to reconstruct. Implemented in Trezor Safe-series and BitBox as an alternative to BIP-39 single-seed backup.

A wallet configuration requiring multiple signatures (m of n) to authorise a transaction. Common setups use diverse hardware wallets from different vendors to eliminate single-vendor-trust failure modes for high-value holdings.

A tamper-resistant cryptographic chip designed to store keys and perform signing operations in physical isolation from the host device. Common certifications: Common Criteria EAL5+, EAL6+.

A Bitcoin protocol upgrade activated in November 2021 introducing Schnorr signatures and Merkleized Alternative Script Trees. Enables more efficient and private multisig and complex scripts.

An Ethereum protocol upgrade introducing blob-carrying transactions to reduce L2 rollup costs. Activated in March 2024 as part of the Dencun hard fork.

A scaling solution built on top of a Layer 1 blockchain. Examples: Arbitrum, Optimism, Base, zkSync Era, StarkNet (Ethereum L2s); Lightning Network (Bitcoin L2).

A specific Layer 2 architecture that bundles many transactions off-chain and posts proof or data to the L1. Optimistic rollups (Arbitrum, Optimism) assume validity; ZK rollups (zkSync, StarkNet) prove validity cryptographically.

Wallet-as-a-Service. A B2B model where embedded wallet infrastructure is provided to third-party applications. WaaS providers serving EU end-users may be CASPs under MiCA depending on their service profile.

Directive (EU) 2023/2226. Extends EU administrative cooperation in tax matters to crypto-assets. From 1 January 2026, EU CASPs must report client transactions to national tax authorities, which exchange information across the bloc.

German tax-profit determination for crypto transactions. Under EStG §23, crypto sales within 12 months of acquisition are taxable as private sales income at the individual marginal rate; sales after 12 months of holding are tax-free for retail private investors.

Prélèvement Forfaitaire Unique. France's 30% flat tax on capital gains from occasional crypto sales by individuals. Active traders may be reclassified to BIC (Bénéfices Industriels et Commerciaux) progressive rates.

Spain's wealth tax (Impuesto sobre el Patrimonio). Net wealth above regional thresholds is taxed at progressive rates; crypto-asset holdings are included in the tax base at year-end fair-market value.

The acquisition cost of an asset, used to calculate capital gains on disposal. EU jurisdictions vary on permitted methods: FIFO (DE default), HIFO (DE optional for crypto), specific identification (NL allows).

First-In, First-Out. A cost-basis accounting method where the earliest-acquired units are deemed disposed of first. The default method for German private crypto disposals under EStG §23.

Unlike the US, German tax law does not impose a wash-sale rule on crypto disposals. Investors can realise losses by selling and immediately repurchasing without triggering loss-deferral. This is regularly used for end-of-year tax-loss harvesting.

Paper gains on crypto holdings that have not been disposed of. In most EU jurisdictions, unrealised gains are not currently taxed. Spanish wealth tax is a notable exception (taxed annually on year-end fair-market value).

Tools that aggregate transaction data from exchanges, wallets, and onchain history, then produce tax-compliant reports. Examples: Blockpit (DACH-focused), CoinTracking, Koinly, CoinLedger. Outside MiCA scope.