Lending Sits Outside MiCA, and Banks Know It
Crypto lending is the clearest regulatory gap in the sector. MiCA authorises ten crypto-asset services and lending is not among them, so a CASP licence does not cover a lending book. In most EU jurisdictions there is no dedicated authorisation for crypto-collateralised lending at all, which leaves the activity governed by general financial, consumer credit, and money-laundering law rather than a purpose-built regime.
Lending platforms are therefore underwritten on their own documentation rather than on a regulator’s. Every control a licensed firm would evidence by pointing at its authorisation, a lending platform has to evidence directly.
Four Tests Decide the File, and Rehypothecation Comes First
Rehypothecation policy. This is the single question that decides the conversation: whether pledged collateral is re-used, and if so on what terms and with what disclosure. Re-use of client collateral sat at the centre of the 2022 failures in this sector, and institutions have not forgotten. A platform that does not re-use collateral should say so first and prove it, because the assumption in the absence of a clear answer is that it does.
Collateral, margin, and liquidation. Loan-to-value bands, margin-call mechanics, liquidation triggers, and what happens in a gap move when liquidation cannot execute at the trigger price. Institutions ask for the stress case, not the base case.
Segregation and insolvency treatment. Whether borrower collateral and lender funds are segregated from the platform’s own balance sheet, and what a holder’s position would be in an insolvency. An honest answer that the position is unsecured is better received than an implied protection that does not exist.
Consumer versus institutional. A retail-facing lending product attracts consumer credit rules in most jurisdictions. A platform serving only institutional counterparties presents a materially simpler file, and structuring for that is a legitimate route to bankability.
The Fiat Leg Is the Placement
Most of a lending platform’s activity is on-chain and needs no bank. The bank matters for the fiat leg: drawdowns paid out in currency, repayments received, interest settled, and the operating business itself. That is a smaller flow than an exchange’s but a more scrutinised one, because each movement is credit-related.
Where the platform holds client fiat at any point, general client-money principles apply. MiCA Article 70 safeguarding applies on top of them where the entity is also a CASP for other services, which means client funds must be placed with a central bank or credit institution by the end of the following business day and held separately identifiable.[1]
Platforms that never touch client fiat, settling only in crypto and paying out through a licensed third party, avoid the hardest part of the placement, and that is worth designing for.
Client Fiat Is the Only Hard Layer in the Stack
| Layer | Institution | Difficulty | Timeline |
|---|---|---|---|
| Operating account | Bank or specialist EMI | Moderate; unregulated status is the friction | 6–12 weeks |
| Drawdown and repayment rail | EMI with high per-item limits | Moderate; per-item limits are the constraint | 6–12 weeks |
| Client fiat (if held) | Credit institution | Hard; often the reason to avoid holding it | 3–6 months |
| Treasury | Bank or EMI | Routine | 2–6 weeks |
Pricing sits in the elevated band because the profile is unregulated rather than because volumes are risky: expect specialist EMI maintenance of €500 to €1,000 a month and enhanced ongoing review. Ranges are indicative across the partner network as of .
How Jagelski & Partners Helps
Lending placement starts by establishing what the platform actually is, because the regulatory gap means two businesses with the same description can present entirely different risk. Institutional-only, no rehypothecation, no client fiat held is a placeable profile. Retail-facing, collateral re-used, client fiat on the balance sheet is frequently not, and we say which one the case is at the assessment stage.
The assessment then covers the fiat leg specifically, since that is what a bank actually touches. It also covers the collateral and liquidation documentation institutions ask for, and the segregation position as it would stand in an insolvency.
Frequently Asked Questions
No. MiCA authorises ten crypto-asset services and lending is not among them, so a CASP licence does not cover a lending book. In most EU jurisdictions there is no dedicated authorisation for crypto-collateralised lending at all.
The activity falls under general financial, consumer credit, and money-laundering law instead, which means it is governed but not purpose-regulated.
The opposite. A licensed firm hands a bank a supervisor to rely on; an unregulated platform hands it a judgement call, and institutions price judgement calls conservatively or decline them.
Every control a licensed firm evidences by pointing at its authorisation, a lending platform has to evidence directly.
Rehypothecation: whether pledged collateral is re-used, on what terms, and with what disclosure. The 2022 failures in this sector were rehypothecation failures, and institutions have not forgotten.
A platform that does not re-use collateral should say so first and prove it, because the assumption in the absence of a clear answer is that it does.
Loan-to-value bands, margin-call mechanics, liquidation triggers, and specifically what happens in a gap move when liquidation cannot execute at the trigger price. Institutions ask for the stress case rather than the base case.
A model that only describes orderly liquidation has not answered the question that matters.
Substantially. A retail-facing lending product attracts consumer credit rules in most jurisdictions, with disclosure, affordability, and conduct obligations attached.
A platform serving only institutional counterparties presents a materially simpler file, and structuring for institutional-only is a legitimate route to bankability rather than a workaround.
The fiat leg: drawdowns paid in currency, repayments received, interest settled, and the operating business. Most of the activity is on-chain and needs no bank at all.
That is a smaller flow than an exchange’s but more scrutinised, because every movement is credit-related rather than transactional.
Often, and it is worth designing for. Settling only in crypto and paying out through a licensed third party avoids the hardest part of the placement, which is a client-fiat account at a credit institution running three to six months.
Where client fiat is held, general client-money principles apply regardless of whether MiCA safeguarding is engaged.
Pricing sits in the elevated band because the profile is unregulated rather than because the volumes are risky. Expect specialist EMI maintenance of 500 to 1,000 euro a month plus enhanced ongoing review.
Ranges are indicative across the partner network as of June 2026.
Operating and rail accounts run 6 to 12 weeks, longer than for a licensed firm because the diligence is direct rather than delegated to a supervisor. A client-fiat account, where required, runs three to six months.
No. Jagelski & Partners is paid by the institution that takes the business, through a referral or revenue-share arrangement, not by a fee billed to the client. The pricing is the institutional rate, with no markup and no onboarding fee.
Ready to Find Out Whether the Profile Is Placeable As Structured?
Book an assessment. We establish what the platform actually is on rehypothecation, retail exposure, and client fiat, then place the fiat leg against institutions whose appetite admits an unregulated credit profile. Where it will not place as presented, we say so at the assessment stage. No markup on institutional pricing. No onboarding fee.
References
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- European Union, Regulation (EU) 2023/1114 on Markets in Crypto-Assets (MiCA), Article 70 (safeguarding of clients’ funds: deposit with a central bank or credit institution by the end of the following business day, separately identifiable); Title V applicable from , eur-lex.europa.eu, accessed .