When the business model changes mid-application: what to do first
When your business model changes mid-application, notify the competent authority at once and pause any activity that sits outside your original filing. Update the application file to reflect the new model before it is reviewed any further. A material change can reset parts of an assessment the authority had already accepted; staying silent about it does not.
Basis
The authorisation route at issue here sits under Regulation (EU) 2023/1114 (MiCA), which governs how crypto-asset service providers apply for and hold a licence. Where the change touches how value moves between wallets or providers, Regulation (EU) 2023/1113 (TFR) also becomes relevant, because it sets out the information that must travel with a transfer of funds or crypto-assets.
Both instruments describe the regime you are being assessed against. Neither tells you, on its own, whether your specific change counts as material. That judgment sits with the authority handling your file, working from the notification you send and the evidence attached to it.
What changes in practice
A change of business model during examination is not neutral. A competent authority assesses the application against the model described in the file, not against what the business becomes six months later. If the file no longer matches reality, both the review clock and the substance of what is being reviewed can shift.
The table below sets out where each type of change tends to land, in general terms.
| Type of change | Relevant EU instrument | What typically follows |
|---|---|---|
| New crypto-asset services added to the offering | Regulation (EU) 2023/1114 (MiCA) | Review of the licence scope requested |
| Change affecting how transfers of funds or crypto-assets are structured | Regulation (EU) 2023/1113 (TFR) | Review of the information that must accompany a transfer |
| Change to the custody or safeguarding arrangement | Regulation (EU) 2023/1114 (MiCA) | Reassessment of client-asset protection |
| Change to the client base or the jurisdictions served | Regulation (EU) 2023/1114 (MiCA) | Reassessment of the passporting basis claimed |
What to do first
- Identify precisely what changed: service type, custody model, client base, or the crypto-assets covered.
- Notify the competent authority in writing before the change goes live, not after it has already started.
- Prepare an updated annex to the application that describes the new model in its own terms, rather than as a patch to the old one.
- Check the change against Regulation (EU) 2023/1113 (TFR) if it affects how transfers of funds or crypto-assets are structured.
- Keep the original filing on record for comparison; do not overwrite it silently.
- Assign one person to own all correspondence with the authority on this point.
Who decides
The competent authority handling the authorisation decides whether the change is material and how it affects the file under review. It works from what your notification states and from the supporting evidence you attach, not from your own assessment of how serious the change is. Its own procedure sets the pace of what happens next; the authority communicates its assessment period, and a change tied to a specific element of the file typically extends or restarts the part of that period tied to that element.
If your situation differs
If the change adds a channel that increases the volume of data subject requests you receive, treat that as a separate workstream: Access requests arrive in volume data protection.
If the new model relies on a partner distributing under your brand, plan separately for what happens if that arrangement ends badly: When a licensee keeps using the brand after termination.
If the redesign involves building a new customer or training data set with interns or short-term contractors, ownership of that data set is a distinct question: A data set was assembled by an intern ownership.
If the underlying token structure forks as part of the redesign, that is not the same question as the authorisation notification: A fork duplicates the token tokenised rights.
What this page does not solve
This page does not tell you whether your particular business model change counts as material under MiCA, and it does not set the length of any assessment period. Those depend on the competent authority reviewing your file and on how it reads the evidence you send. It does not cover drafting the updated policies themselves, or negotiating terms with a custody or distribution partner affected by the change.
Cost and response
Cost on a matter like this depends on how many registries and jurisdictions are involved, whether a review clock is already running, and whether a supervisor has raised questions before your notification arrives. A first response from a partner comes within minutes during business hours. A fee estimate follows within one working day, once the scope of the change is clear.
Checked
Checked on 14 May 2025. Primary sources: Regulation (EU) 2023/1114 (MiCA); Regulation (EU) 2023/1113 (TFR).
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FAQ
What is the first step when the business model changes mid-application?
Notify the competent authority in writing before the changed part of the model goes live. Pause activity that sits outside what was originally filed until the authority has seen the update.
Which deadline is already running?
The assessment period the authority set when it received the original application keeps running unless the change is material enough to restart or extend the part tied to the altered element. The authority, not the applicant, confirms which applies.
Who decides, and on what evidence?
The competent authority reviewing the application decides. It works from the notification of the change and the supporting documents attached to it, weighed against the model originally described in the file.