MiCA and Beneficial Ownership: Compliance Obligations Explained

The regulatory landscape for digital assets and corporate transparency has undergone significant transformation with the implementation of the Markets in Crypto-Assets (MiCA) regulation alongside enhanced beneficial ownership reporting requirements. As these frameworks converge, businesses operating in the digital asset space must navigate complex compliance obligations that span both crypto-specific regulations and traditional anti-money laundering (AML) requirements.

Table of Contents

• Understanding the Corporate Transparency Act and Beneficial Ownership Reporting
• Defining Beneficial Owners and Reporting Obligations
• Reporting Companies and Their Obligations
• The Challenge of Anonymous Shell Companies
• MiCA's Impact on Beneficial Ownership Compliance
• Filing Beneficial Ownership Information Reports
• Access to Beneficial Ownership Information (BOI)
• Compliance Strategies for Private Companies
• Enforcement and Penalties
• Technology Solutions and Compliance Management

Understanding the Corporate Transparency Act and Beneficial Ownership Reporting

The Corporate Transparency Act (CTA) represents a watershed moment in U.S. corporate transparency efforts, establishing comprehensive beneficial ownership information reporting requirements for millions of entities. Under this legislation, reporting companies must disclose detailed beneficial ownership information to the Financial Crimes Enforcement Network (FinCEN), fundamentally changing how businesses approach compliance and transparency. The law applies to a wide range of legal entities, including corporations, limited liability companies, and other entities, ensuring that legal entities of various types are subject to the CTA's reporting requirements.

The CTA’s reporting requirements apply to both domestic reporting companies and foreign reporting companies that conduct business in the United States. A domestic reporting company is a legal entity, such as a corporation, limited liability company, or other entity, created by the filing of a document with a secretary of state or a similar office of a state or Indian tribe. A limited liability company is a type of legal entity created by filing a document with a secretary of state or similar office. Foreign reporting companies are entities formed under the law of a foreign country and registered to do business in any U.S. state or Indian tribe through the filing of a document with a secretary of state or similar office. Reporting companies registered to do business in the United States must comply with the CTA's reporting requirements. The process of entity creation, including the filing of a document with a secretary or similar office, is a key step in determining whether an entity qualifies as a reporting company under the CTA.

Defining Beneficial Owners and Reporting Obligations

Under the beneficial ownership rule, entities must identify individuals who are considered beneficial owners through two primary criteria: ownership interest and substantial control. An individual qualifies as a beneficial owner if they ultimately own or control at least 25% of the ownership interests in the reporting entity, or if they exercise substantial control—meaning anyone who exercises substantial control over the entity through various means including senior officer positions, authority over key decisions, or any other form of significant control.

The initial BOI report must include comprehensive information about each beneficial owner, including full legal names, dates of birth, current addresses, and an acceptable identification document such as a driver’s license or passport. This beneficial ownership data serves critical functions for law enforcement agencies investigating money laundering, tax fraud, and other financial crimes.

Reporting Companies and Their Obligations

The vast majority of U.S. business entities will need to comply with these beneficial ownership reporting requirements. Reporting companies created after January 1, 2024, must file their initial BOI reports within 90 days of formation, while existing entities have until January 1, 2025, to submit their reports. Foreign entities and existing foreign companies registered to do business in the United States face similar deadlines and requirements.

However, certain entities are exempt from these requirements, including publicly traded companies, large operating companies with substantial revenue and employee counts, financial institutions already subject to extensive regulatory oversight, and various other categories specifically outlined in the interim final rule published in the Federal Register. Such entities are not required to submit beneficial ownership information under the current regulations.

The Challenge of Anonymous Shell Companies

One of the primary objectives of the Corporate Transparency Act is to combat the misuse of anonymous shell companies for illicit purposes. These entities, often formed without meaningful business operations, have historically been used to evade sanctions imposed by the U.S. government, facilitate money laundering schemes, and conceal beneficial ownership from legitimate businesses and law enforcement agencies.

By requiring comprehensive beneficial ownership information reporting, the legislation aims to prevent money laundering and enhance national security by providing authorized users within government agencies access to crucial ownership data. This transparency helps identify when entities formed in the United States or foreign countries are being misused for criminal purposes. Beneficial ownership information is also critical for compliance with government contracts and related regulatory requirements, ensuring that companies meet standards for export licensing, loan approvals, and sanction enforcement.

MiCA's Impact on Beneficial Ownership Compliance

The Markets in Crypto-Assets regulation adds another layer of complexity for companies operating in the digital asset space. MiCA’s comprehensive framework for crypto-asset service providers includes specific requirements for customer due diligence, beneficial ownership identification, and ongoing monitoring that complement existing beneficial ownership reporting requirements under the Corporate Transparency Act. The Treasury Department, through FinCEN, is responsible for implementing and enforcing these reporting requirements.

Crypto-asset service providers must maintain detailed records of their beneficial ownership structures and ensure compliance with both MiCA’s customer identification requirements and the CTA’s beneficial ownership information (BOI) reporting obligations. This dual compliance framework requires sophisticated systems and processes to manage overlapping but distinct regulatory requirements.

Filing Beneficial Ownership Information Reports

Filing beneficial ownership information reports is a fundamental requirement for foreign reporting companies seeking to do business in the United States. The Financial Crimes Enforcement Network (FinCEN) mandates that these entities submit a beneficial ownership information (BOI) report, which captures essential details about the company’s beneficial owners and company applicants. This process is designed to enhance corporate transparency and help prevent money laundering and other illicit activities.

Foreign reporting companies must file their initial BOI reports electronically through FinCEN’s secure online system. The BOI report must include the full legal names, dates of birth, residential or business addresses, and identifying numbers from acceptable identification documents—such as passports or driver’s licenses—of all beneficial owners and company applicants. For new foreign reporting companies, the initial BOI must be filed within 30 days of registering to conduct business in the United States. Existing foreign companies that were already registered before the publication of the interim final rule have 30 days from the rule’s effective date to submit their reports.

Strict adherence to these reporting requirements is essential. Failure to file accurate and timely BOI reports can result in significant penalties and fines, as enforced by the Financial Crimes Enforcement Network. By ensuring compliance, foreign reporting companies not only meet their legal obligations but also contribute to the broader effort to combat money laundering and promote integrity within the U.S. financial system.

Access to Beneficial Ownership Information (BOI)

Access to beneficial ownership information (BOI) is carefully regulated to protect sensitive data while supporting the goals of the Corporate Transparency Act. Only authorized users—including federal, state, local, and tribal officials, as well as certain foreign officials—are permitted to access BOI for specific purposes. Financial institutions may also access beneficial ownership information, but only with the explicit consent of the reporting company, and typically in connection with customer due diligence or compliance with anti-money laundering regulations.

The CTA’s reporting requirements ensure that foreign reporting companies provide BOI to FinCEN, while domestic reporting companies are generally exempt from BOI reporting under the interim final rule. This distinction helps balance the need for beneficial ownership transparency with privacy considerations for domestic entities.

Authorized users rely on BOI to support national security, intelligence gathering, and law enforcement investigations, particularly in efforts to prevent money laundering and other financial crimes. By restricting access to only those with a legitimate need, the CTA safeguards sensitive information while enabling effective oversight and enforcement. This approach ensures that the reporting of beneficial ownership information serves its intended purpose—promoting corporate transparency and protecting the integrity of the U.S. financial system—without exposing private data to unnecessary risk.

Compliance Strategies for Private Companies

Private companies operating in both traditional and digital asset sectors must develop comprehensive compliance programs that address the full scope of beneficial ownership reporting requirements. This includes establishing procedures to identify and verify beneficial owners, maintain accurate beneficial ownership data, and file BOI reports within required timeframes. In addition to beneficial owners, companies must also identify the company applicant responsible for registering the entity and include this information in their filings.

The reporting requirements extend beyond simple ownership percentages to include individuals who exercise substantial control through management positions, voting arrangements, or other means of significant influence. Companies must also consider politically exposed persons and other risk factors that may trigger enhanced due diligence requirements under various regulatory frameworks.

Enforcement and Penalties

The Financial Crimes Enforcement Network (FinCEN) has broad authority to enforce beneficial ownership reporting requirements, with significant penalties for non-compliance. Companies that fail to report beneficial ownership information or provide false or incomplete information face substantial civil and criminal penalties. While these enforcement mechanisms underscore the serious nature of these compliance obligations and the government’s commitment to corporate transparency, certain exemptions from reporting requirements may apply to U.S. persons, depending on their status as beneficial owners.

Law enforcement agencies rely on beneficial ownership data to investigate serious tax fraud, money laundering, and other financial crimes. The integration of this information with other investigative tools enhances the government’s ability to trace illicit financial flows and hold bad actors accountable.

Technology Solutions and Compliance Management

Given the complexity of managing beneficial ownership information across multiple regulatory frameworks, many companies are investing in technology solutions that can automate data collection, verification, and reporting processes. These systems help companies report BOI and meet their BOI reporting requirements, ensuring accuracy in initial reports and ongoing updates while reducing the administrative burden associated with compliance.

The Paperwork Reduction Act considerations that influenced the design of beneficial ownership reporting requirements reflect an attempt to balance regulatory objectives with practical implementation challenges. However, the complexity of modern business structures and the intersection of various regulatory requirements often necessitate sophisticated compliance management systems. Technology can streamline the process of reporting BOI and ensure compliance with reporting boi obligations.

Conclusion

As regulatory expectations grow more complex—merging traditional AML obligations with evolving digital asset frameworks like MiCA—businesses need scalable, intelligent tools to stay compliant. MarketGuard empowers companies to meet these evolving beneficial ownership reporting requirements with confidence, ensuring timely submissions, accurate disclosures, and seamless integration with broader AML programs.

By combining real-time monitoring, automated risk assessments, and flexible workflows, MarketGuard helps financial institutions and crypto asset service providers maintain full visibility over their legal entities, beneficial owners, and transaction activity. As frameworks such as the Corporate Transparency Act and MiCA continue to develop, MarketGuard provides the technological backbone needed to adapt quickly, reduce manual workload, and maintain compliance across jurisdictions.

In an era where regulatory oversight is intensifying, partnering with a trusted compliance solution like MarketGuard isn’t just a competitive advantage—it’s a necessity.

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References

• Financial Crimes Enforcement Network (FinCEN). “Beneficial Ownership Information Reporting.” https://www.fincen.gov/boi

• Corporate Transparency Act, 31 U.S.C. § 5336. https://www.congress.gov/bill/116th-congress/house-bill/2513

• U.S. Department of the Treasury. “FinCEN Issues Final Rule for Beneficial Ownership Information Reporting.” https://home.treasury.gov/news/press-releases/jy0974

• European Commission. “Regulation on Markets in Crypto-Assets (MiCA).” https://finance.ec.europa.eu/publications/regulation-markets-crypto-assets-mica_en

• Financial Action Task Force (FATF). “Guidance on Transparency and Beneficial Ownership.” https://www.fatf-gafi.org/publications/fatfrecommendations/documents/transparency-beneficial-ownership.html

• U.S. Department of Justice. “Combating the Illicit Use of Corporate Structures.” https://www.justice.gov/opa/pr

• U.S. Small Business Administration. “Corporate Transparency Act: Small Business Compliance.” https://www.sba.gov

• MarketGuard. “Compliance Automation for Beneficial Ownership Reporting.” https://www.marketguard.tech