When holders demand redemption: what to do first
When a holder demands redemption, stop and verify three things before you answer. Check the holder's identity and balance, the exact redemption clause in your white paper, and whether the token is an asset-referenced token or an e-money token under Regulation (EU) 2023/1114 (MiCA). Log the demand with a timestamp. Do not release funds until the procedure and the deadline are confirmed.
What MiCA and TFR actually require
Regulation (EU) 2023/1114 (MiCA) applies from 30 December 2024. It gives holders of asset-referenced tokens and e-money tokens a right of redemption, exercised at any time, at fair value, without an unfair cost to the holder. The regulation does not fix a number of days for processing a request. The day count comes from your own token terms, provided those terms do not undercut the statutory right.
If your token is neither an asset-referenced token nor an e-money token, this particular right does not attach automatically. The redemption mechanic is then whatever your contract with holders actually says, and that document is what you read first.
Regulation (EU) 2023/1113 (TFR) sits alongside MiCA and governs the information that has to travel with a crypto-asset transfer. A redemption payout is a transfer for this purpose. Originator and beneficiary information must accompany it, regardless of how urgently the holder wants the funds back.
What changes the moment a demand arrives
Several clocks start the moment the demand is logged, not the moment you reply to it. Your internal complaints-handling clock starts under your own policy, whatever that policy specifies. The record-keeping clock starts because a regulator can ask for the file later. The TFR information clock starts on the transfer itself, separately from the redemption decision. Treating all of this as a single clock is the most common mistake at this stage.
What to do first, in order
Work through the sequence below before you contact the holder again.
| Step | Who does it | What it checks |
|---|---|---|
| 1. Log the demand | Whoever received it | Date, channel, holder identifier |
| 2. Verify identity and balance | Compliance officer | Holder record against the token register |
| 3. Pull the redemption clause | Legal team | Wording against the MiCA classification |
| 4. Check reserve liquidity | Finance | Whether assets can be sold without a loss |
| 5. Screen the transfer | Compliance officer | Originator and beneficiary data under TFR |
| 6. Sign off in writing | Designated decision-maker | Written approval before release |
Verifying a holder's identity and balance means processing personal data, which is why the arrangement with your service providers matters at this stage. See Data processing agreement and the deadline for what that document says about the clock running on a data request.
Who decides, and on what timeline
The decision belongs to the person or body named in your governance policy, not to whoever first received the message from the holder. That is usually the board, a redemption committee, or a compliance officer with delegated authority. There is no single EU-wide day count for this decision in the sources checked here. What sets the timeline is the clause in your own white paper, tested against the statutory right in Regulation (EU) 2023/1114 (MiCA). If your documentation is silent on a number of days, escalate before quoting one to a holder.
If your situation differs
- If your token is an asset-referenced token or an e-money token, then the MiCA redemption right applies whatever your marketing materials say.
- If your token is neither, then no EU-wide redemption right attaches automatically, and your own contract with holders governs the outcome.
- If the transfer instructions from the holder arrive without full originator data, then hold the payout and resolve the TFR gap first, rather than treating the two issues separately.
What this page does not resolve
This page does not tell you which category your specific token falls into; that depends on documents this page has not reviewed. It does not calculate whether your reserve is liquid enough, and it does not draft the redemption notice for you.
Where the holder or a counterparty involved in the redemption is based in Poland, checking that counterparty sits outside this page. See Counterparty in Poland and its limits for what a register search can and cannot confirm.
The documents supporting the demand — powers of attorney, corporate extracts, proof of holding — raise a separate question. See Document report poland for what a document check actually establishes.
Where the redemption touches more than one jurisdiction, the starting point for what a jurisdiction search establishes is Jurisdiction report poland.
Related reading
Redemption demands often surface together with white paper questions. If your white paper is already out of date, the order of what to fix first is different. See When a white paper needs an update: what to do first.
If a demand is already sitting in your inbox, start the sequence above today. The sequence matters more than the wording of your reply.
Checked
Checked: March 2025. Primary sources: Regulation (EU) 2023/1114 (MiCA); Regulation (EU) 2023/1113 (TFR).
Frequently asked questions
What is the first step when holders demand redemption?
Log the demand with a timestamp, then verify the holder's identity and balance before you say anything about timing.
Which deadline is already running?
Your internal complaints clock and the TFR information clock on the transfer both start immediately. MiCA itself does not fix a day count for the redemption decision in the sources checked here.
Who decides, and on what evidence?
The person or body named in your governance policy decides, based on the token's classification under Regulation (EU) 2023/1114 (MiCA), verified holder identity, and a reserve liquidity check.