The regulation of crypto-assets is evolving rapidly around the world, and the European Union is establishing a unified framework for this innovative yet risky sector through the MiCA Regulation. In Slovakia, where the National Bank of Slovakia (NBS) is responsible for supervision and regulation, prospective crypto-asset service providers are being given a unique opportunity to engage in pre-licensing dialogue.
What is the pre-licensing dialogue?
The pre-licensing dialogue is a new initiative that allows potential applicants for a license to provide crypto-asset services to engage in an open and constructive dialogue with the NBS even before submitting an official application, with the aim of clarifying all key issues that may affect the application review process. This approach helps prevent potential complications and streamlines the entire licensing process.
As the law firm Hronček & Partners, s. r. o., we had the honor of representing our client during the historically first pre-licensing dialogue with the NBS, through which we not only gained valuable experience but also gained insight into key aspects of this new regulation. In this article, we share our insights and recommendations, which may be useful for anyone planning to take this important step toward obtaining a license.
What are the benefits of the pre-licensing dialogue?
For applicants seeking a license to provide cryptoasset services, the pre-licensing dialogue offers a significant advantage. This process enables:
A clear understanding of the NBS’s requirements: Before submitting an application, applicants can obtain specific guidance and recommendations to help them better prepare for the entire licensing process.
The opportunity to avoid errors and deficiencies: The dialogue provides an opportunity to clarify potential deficiencies in the submitted application even before its official filing, thereby reducing the risk of the application being rejected due to irregularities.
Greater transparency: The applicant gains a better understanding of what the NBS considers key when assessing license applications, which can significantly facilitate the entire process
Our experience with the first-ever pre-licensing dialogue
As one of the first participants in this process, we had the opportunity to see how this new model of cooperation works in practice. Our role as legal representatives was to prepare the client for all aspects of the dialogue and ensure that their documentation and processes comply with legislative requirements.
During the meeting with the NBS, we appreciated the professional and constructive approach taken by the regulatory authority. The dialogue was conducted in the spirit of open discussion, with an emphasis on specific aspects of the client’s planned services and their compliance with the MiCA Regulation.
Topics covered in the dialogue:
During the dialogue, we discussed several areas critical to the granting of a license. Among the most important topics covered in our dialogue were:
The applicant’s business model
The NBS requires the applicant to clearly and in detail define its business model, the method of providing crypto-asset services, and their secure management. During the dialogue, we also focused on the target groups to whom crypto-asset services will be provided, as well as the methods of accessing such services.
Shareholder and Personnel Structure
The NBS emphasizes the transparency of the shareholder structure, as well as the qualifications and professional background of the management personnel who will be responsible for providing these services. Questions therefore also focused on personnel composition, organizational structure, employee training, and similar matters.
Compliance with AML/CFT Regulations
One of the key areas the NBS emphasizes is ensuring policies and procedures to combat money laundering (AML) and terrorist financing (CFT), which is essential for every business entity operating in the crypto-asset sector.
During the pre-licensing dialogue, we presented internal policies and mechanisms that ensure compliance with AML/CFT requirements. At the same time, we described in detail the procedures for identifying, verifying, and reporting unusual business transactions, including the designation of persons responsible for these activities. In this way, we demonstrated the client’s readiness to meet legal requirements at the highest level.
Internal Controls and Complaint Resolution Processes
The NBS requires a detailed description of internal control mechanisms designed to ensure business continuity and proper risk management, as well as policies to prevent conflicts of interest. At the same time, a clearly defined complaint resolution process is required to enable the effective and fair resolution of customer complaints, thereby strengthening trust in the services provided and ensuring adherence to the highest standards of ethical conduct.
Marketing and Advertising Activities
During the pre-licensing dialogue, we also addressed the issue of the applicant’s planned marketing and advertising activities. The discussion focused on the ways in which the company plans to communicate with the public and potential clients, with an emphasis on transparency, truthfulness, and clarity of the information provided about the services offered. The aim of these measures is to ensure that marketing activities foster client trust and comply with all regulatory requirements.
Recommendations for Future Applicants
Based on our experience, we offer several practical tips for those planning to undergo a pre-licensing dialogue with the NBS:
Thorough preparation is key: Ensure that the necessary documentation, from the business plan to internal policies, is detailed and meets MiCA requirements.
Focus on compliance: Regulatory requirements, particularly in the areas of AML and data protection, are especially strict. We recommend investing in experts who can help you design appropriate measures.
Don’t be afraid to ask: The pre-licensing dialogue is a forum for discussion. Don’t hesitate to raise any questions or concerns that could affect the licensing process.
Choose the right partners: Legal and technical experts who understand the regulations and technological specifics of crypto-assets are an invaluable part of the preparation.
How to Prepare for the Pre-Licensing Dialogue with the NBS
Successfully completing the pre-licensing dialogue with the NBS requires not only thorough preparation but also adherence to specific procedures that ensure the meeting’s effectiveness. Based on our experience and the NBS’s recommendations, here is an overview of the steps you should take before the meeting itself:
1. Completing and Submitting the Questionnaire
One of the first steps is to submit the completed questionnaire along with the attachments. This questionnaire contains basic information about your company, planned services, and strategic goals. To ensure the documentation is delivered securely:
Zip and password-protect the questionnaire along with the attachments.
Send the file via email to crypto@nbs.sk at least five business days before the meeting.
After submission, the NBS will send you instructions on how to send the password for the zipped file.
2. List of questions for the regulator
If you have specific questions regarding the licensing process or regulation, it is important to prepare them in advance. Send this list to the same email address, crypto@nbs.sk, no later than five business days before the meeting. This will allow the NBS to prepare in advance for your questions and provide the most specific answers possible.
3. Preparing for the Company Presentation
At the beginning of the pre-licensing dialogue, you should briefly introduce your company and its plans. The presentation should include:
Overall business strategy: How your business currently operates and what its long-term goals are.
Planned changes and licensing intent: What new services you plan to provide and how you intend to comply with crypto-asset regulations.
Target clientele specification: What type of clients you intend to serve.
Plans to operate in other member states: If you plan to expand beyond Slovakia, it is important to highlight this.
4. Study of Relevant Legislation
You should come to the meeting with a thorough understanding of the legal framework governing the activities of crypto-asset service providers. This includes not only the rules set forth in the MiCA Regulation but also local legislative provisions. The NBS expects applicants to be prepared to discuss the requirements for obtaining a license, including compliance, security, and other key aspects.
Conclusion
The pre-licensing dialogue with the NBS represents a welcome step toward a modern, transparent, and effective regulatory process. It allows future crypto-asset service providers to better understand the regulator’s expectations and prepare for the demanding licensing process.
Our experience with this process has convinced us that thorough preparation, a deep understanding of the regulations, and an open approach are the foundation of success. We believe that this new tool will help not only applicants but also the NBS ensure that the Slovak cryptoasset market is safe, innovative, and fully compliant with European legislation.
