When the application file is returned with questions: what it costs to be wrong
A returned file is not a rejection. It means the competent authority has paused its review and wants specific gaps closed before it continues. The mistake that costs money is not the questions themselves — it is a rushed or inconsistent answer that triggers a second round. Getting this stage wrong routinely adds weeks, and sometimes a full restart, to a file that was otherwise close to approved.
What the questions are actually testing
Authorisation under Regulation (EU) 2023/1114 (MiCA) is assessed against the file as a whole: governance, prudential safeguards, IT arrangements, and the wind-down plan. Where your business moves crypto-assets between providers, the authority also checks your file against Regulation (EU) 2023/1113 (TFR), which sets the information that must travel with a transfer. A returned file with questions almost always points at one of these areas — rarely at something outside the regulation you applied under.
| Question type | What the authority is testing | What you supply in reply |
|---|---|---|
| Ownership and control | Who ultimately controls the applicant | Corrected structure chart, matching source documents |
| Fitness of management | Whether directors meet the standard the file claims | Updated statements, references to the original submission |
| Safeguarding of client assets | Whether the described arrangement actually protects clients on insolvency | Custody agreement, reconciliation process |
| IT and security | Whether the described controls match what is deployed | Technical description consistent with the file, not a new one |
| Transfer-of-funds information | Whether originator and beneficiary data flows meet TFR | Description of the data fields actually captured |
| Wind-down plan | Whether an orderly exit is realistic, not aspirational | Revised plan tied to the business as filed |
What it costs to answer badly
The practical cost is rarely the answer itself. It is what an inconsistent answer does to the rest of the file. If your reply on governance contradicts the structure chart submitted earlier, the authority does not treat this as a typo. It treats it as a reason to ask further questions across sections that were previously accepted. Each further round resets the clock the authority is running internally, and it resets your own commercial timeline for going live.
What to do, in order
- Log the exact wording of every question the letter contains — do not paraphrase it internally before responding.
- Assign one owner per question — the compliance officer, the technical lead, or external counsel, not a shared inbox.
- Answer only what is asked. Do not volunteer new commitments that were not part of the original file.
- Cross-check every factual statement against the application already on file before the reply goes out.
- Keep a version history of the file — the authority compares the reply against what it already holds.
- Have counsel review the reply before it is filed, specifically for consistency with earlier submissions.
Who decides
The competent authority that received your original application decides whether your reply resolves the question or requires another round. It decides on the amended file, any supporting evidence you attach, and whether your answer is consistent with what you submitted at the outset. There is no separate appeal body at this stage — the file simply continues, or it does not.
Where this splits by what the questions actually concern
If a data-protection supervisory authority is reviewing the same processing arrangements in parallel, treat that as a separate track: see When a supervisory authority sends a first request.
If the questions trace back to who actually owns the software underpinning your platform, resolving that ownership question usually has to happen before the authorisation reply is finalised: see A contractor claims ownership of the code ownership of.
If the file references token rights governed by a smart contract, and the contract's logic does not match the written licence you filed, the authority's question will not go away until the two are aligned: see A smart contract conflicts with the written licence tokenised.
If a competitor challenges your brand while the authorisation file is still open, keep the two matters formally separate in your correspondence with the authority: see When a competitor claims bad faith.
What this page does not decide
This page does not draft your reply, does not tell you what the authority will accept, and does not set a fixed number of working days — that figure depends on the authority's own letter and on how quickly you close each gap. It also does not cover governance questions raised after authorisation is granted, which sit on a different track.
Verified
Checked against the current text of Regulation (EU) 2023/1114 (MiCA) and Regulation (EU) 2023/1113 (TFR), both in force from 30 December 2024. Where a question in your file touches national implementation rather than the regulation directly, that answer sits outside this page.
Related
See also: A supervisor asks about governance authorisation what it costs.
FAQ
What is the first step when the application file is returned with questions?
Log the exact wording of each question and assign one internal owner before drafting anything. A reply that answers only what was asked, checked against the original file, is what moves the review forward.
Which deadline is already running?
The authority's review is generally treated as paused while it waits for your reply, but the point at which it resumes is set by the authority's own letter, not by a date you calculate yourself. Read the letter for that instruction before assuming any clock.
Who decides, and on what evidence?
The competent authority that received your original application decides, based on the amended file, any supporting documents you attach, and whether the reply is consistent with the application it already holds.
If your file has already gone through one round of questions and a second letter has arrived, a partner can review the wording with you the same working day. Get in touch and expect a first response within minutes during working hours.