When a key function holder resigns: what to do first
Notify the competent authority without delay and arrange interim cover for the vacant function. Resignation does not suspend the authorisation, but it opens a gap in the fit-and-proper composition of the management body. That gap has to be closed and evidenced before the next supervisory contact, not after it.
Legal basis
Regulation (EU) 2023/1114 (MiCA) requires an authorised crypto-asset service provider to keep its management body and key function holders fit and proper at all times. A resignation changes that composition, and the duty to keep the authority informed follows directly from that requirement. The regulation does not prescribe a notification form; that detail sits with each competent authority's own procedure.
Practical consequence
The immediate consequence is operational before it is legal. Decisions that required sign-off by the vacant function — risk assessments, escalations, record approvals — now have no owner. If the same person also maintained data-protection registers, those registers can fall out of date within days, a related but separate failure covered in Records of processing are incomplete data protection. Treat the vacancy as a control gap first, and as a notification duty second.
What to do first
- Confirm the resignation date in writing and record it in the governance file. Responsible: compliance officer or company secretary.
- Appoint an interim holder from within the management body, even for a short transition. Responsible: the management body.
- Notify the competent authority of the change through its published notification channel. Responsible: the authorised representative.
- Update the register of key function holders and the organisational chart held for supervisory purposes. Responsible: the compliance function.
- Open a fit-and-proper assessment for any permanent replacement before the appointment is confirmed. Responsible: the management body.
- Log every step with a timestamp, so the gap-coverage plan can be shown at the next review. Responsible: compliance officer.
Who decides
| Question | Decided by | On what basis |
|---|---|---|
| Whether interim cover is adequate | Competent authority | Notification and supporting file |
| Whether the replacement is fit and proper | Competent authority, on the provider's proposal | Fit-and-proper assessment |
| Whether the authorisation stays valid during the gap | Competent authority | Continuity of the required functions, not the vacancy itself |
Scenarios
If the vacancy is filled internally within the transition period, the authority typically expects the notification and the updated register, without a fresh assessment beyond the interim holder's existing status.
If the resigning holder covered several jurisdictions — for instance, where the compliance team itself is split across borders — the notification duty runs in each jurisdiction where the provider is authorised, not only where the person was based. That coordination problem overlaps with The team is spread across three countries ownership of, although the underlying question there is ownership, not authorisation.
If no interim holder can be found, the authority may require a remediation timetable before it authorises any further activity that depends on the vacant function.
Limits of this guide
This page does not cover competing claims over assets or code that the resigning holder worked with. A dispute over a copied design sits with When a design is copied by a competitor, not with authorisation.
It also does not cover enforcement disputes against a token holder. That question sits with Enforcement is sought against a holder tokenised rights, a separate procedure with its own forum.
Verified
Last checked: October 2025. Primary source: Regulation (EU) 2023/1114 (MiCA), Official Journal of the European Union.
Related publications
A parallel situation is covered in When an on-site inspection is announced, where the timing of a supervisory visit sets its own procedural clock.
Frequently asked questions
What is the first step when a key function holder resigns?
The first step is to confirm the resignation in writing and identify interim cover for the vacant function. Notification to the competent authority follows once cover is secured, so it reflects a resolved situation rather than an open one.
Which deadline is already running?
A deadline starts on the day the resignation takes effect, but its exact length is set by each competent authority's own procedural rules, not by the regulation itself. Check the authority's published guidance for the notification window that applies to your authorisation.
Who decides, and on what evidence?
The competent authority that granted the authorisation decides, based on the notification, the updated register of key function holders, and the fit-and-proper file for any replacement. It assesses whether the required functions remain adequately covered, not the vacancy itself.
Before you close the file
If a key function holder has already resigned and the authority has not yet been notified, treat the notification as the priority conversation to have today, ahead of the recruitment process. A gap-coverage plan reviewed before it reaches the file is easier to defend than one written after a question is asked about it.