Jurisdictions

Jurisdictions

The fXYZ Network operates a multi-jurisdictional strategy anchored in the European Union's single authorization framework. Rather than seeking separate licenses in each country, the network leverages MiCA's passporting mechanism to establish a single EU authorization that enables operations across all 27 member states.

Beyond the EU, the network plans selective expansion into non-EU markets where regulatory frameworks support digital asset services and where the network's member base creates demand.

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EU Single Passport

MiCA Article 65 establishes a single authorization regime for crypto-asset service providers (CASPs) across the European Union. This mechanism is the cornerstone of the network's jurisdictional strategy.

How Passporting Works

1. Home state authorization - The CASP obtains a license from the national competent authority (NCA) in one EU member state
2. Notification - The home NCA notifies the host NCAs in any member states where the CASP intends to operate, as well as ESMA
3. No host country approval - The host member state cannot impose additional authorization requirements. The home state license is sufficient
4. ESMA register - ESMA maintains a public register of all authorized CASPs, providing transparency for consumers and counterparties

Practical Implications

• A single CASP authorization covers all 27 EU member states plus EEA countries that adopt MiCA
• The home NCA retains supervisory responsibility, providing a single point of regulatory contact
• Cross-border operations require only notification, not re-application
• Capital requirements are set once at the home state level and apply across all operating jurisdictions

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Jurisdiction Profiles

Poland (Home Jurisdiction)

Poland serves as the network's home jurisdiction. The founding entity is established here, and the primary regulatory relationship is with Polish authorities.

MiCA implementation status: The Crypto-Assets Market Act (Ustawa o rynku kryptoaktywow) was adopted by the Sejm in September 2025. Final enactment is pending, with the legislative process subject to the standard presidential signature and publication timeline.

Transitional provisions: Under MiCA Article 143, existing VASPs registered in EU member states may continue to provide services under their national registrations until July 1, 2026, or until a CASP application is decided, whichever comes first.

National requirements beyond MiCA baseline:

• Supervisory levy: 0.4% annual levy on regulated activity revenue, payable to KNF
• Enhanced sanctions: Criminal penalties for operating without authorization of up to PLN 5 million or imprisonment of up to 5 years, exceeding MiCA's minimum sanctions framework
• KNF CASP processing: Approximately 50 working days from complete application to decision (once the implementing legislation is in force)

Lithuania (EU Licensing)

Lithuania is under evaluation as a potential licensing jurisdiction, offering one of the fastest and most cost-effective authorization processes in the EU.

Advantages:

• Fintech supervision experience: The Bank of Lithuania supervises over 200 fintech entities, providing deep institutional expertise in digital financial services
• Processing speed: Among the fastest authorization timelines in the EU for both payment institutions and digital asset service providers
• English-language processes: Regulatory submissions and correspondence are accepted in English, reducing translation costs and delays
• Competitive cost structure: Among the lowest total authorization costs of reputable EU jurisdictions

Substance requirements: Lithuanian licensing requires genuine local presence, including a registered office, at least one EU-resident director, and a locally resident AML compliance officer. These are not formalities; the Bank of Lithuania actively verifies operational substance.

Czech Republic (Alternative EU Licensing)

The Czech Republic serves as an alternative EU licensing jurisdiction, offering geographic proximity to Poland and a pragmatic regulatory environment.

Advantages:

• Geographic proximity: Shares a border with Poland, simplifying operational coordination between entities
• Pragmatic regulatory culture: The CNB has a reputation for clear, predictable regulatory processes
• EU member state: Full access to MiCA passporting under Article 65

Turkey (Non-EU Expansion)

Turkey represents the network's first planned non-EU market, operating under a separate regulatory framework from MiCA.

Turkey maintains its own digital asset regulatory framework, independent of MiCA. The CMB requires higher minimum capital than comparable EU authorizations and mandates the A.S. corporate form, which carries stricter governance requirements than the limited liability structures common in EU jurisdictions.

Strategic approach: The network plans to enter the Turkish market through a partnership model initially, collaborating with a locally licensed entity. A proprietary CMB license will be pursued as transaction volumes and member demand justify the investment.

Strategic role: Turkey provides access to a large, digitally active population and serves as a corridor for non-EU operations, complementing the EU passport coverage.

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Jurisdiction Comparison

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Network Expansion Model

The fXYZ Network is designed to grow through its membership structure. As the network expands, additional jurisdictions may be added through member entities that operate under their local regulatory requirements while participating in the network's shared governance framework.

This federated approach means that the network does not need to obtain a license in every jurisdiction directly. Instead, locally authorized member entities can connect to the network infrastructure while maintaining their own regulatory compliance. The EU passport covers the core entity's operations across EU member states, while non-EU expansion follows a market-by-market licensing or partnership approach.

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References

• MiCA Article 65 — Passporting (EUR-Lex) — Single authorization and notification procedure for cross-border CASP operations
• ESMA CASP Register — Public register of authorized CASPs maintained by ESMA
• ESMA CASP Authorisation Briefing (Jan 2025) — Application processing guidance for national competent authorities
• Bank of Lithuania — Fintech Supervision — Lithuanian NCA for fintech entities, including digital asset service providers
• MiCA CASP License Timeline — Key2Law — Processing timeline estimates for CASP authorization applications