CashXChain operates as a technology infrastructure provider with a strict zero-custody and zero-disposal-authority model. All regulated financial activities — including custody, execution, AML compliance, and Travel Rule obligations — are performed exclusively by licensed partners. Under the applicable EU regulatory frameworks (MiCA, PSD2, AMLD6, and the EU Transfer of Funds Regulation), CashXChain is positioned outside the scope of Crypto-Asset Service Provider (CASP) classification, provided that its technical and contractual structure continues to enforce a strict separation between instruction and execution.
1. Regulatory Positioning
CashXChain UG (haftungsbeschränkt) is a technology infrastructure provider only. It is not a bank, credit institution, licensed payment institution, e-money institution, broker, investment firm, or financial advisor, and is not regulated as such under PSD2, MiCAR, KWG, ZAG, or any other financial services regulation.
CashXChain does not hold, transfer, or custody funds, and does not provide financial, investment, tax, or legal advice. All regulated payment services, crypto-asset conversions, fiat on/off-ramps, custody, and settlement are executed exclusively by licensed and regulated partner institutions in their own names and under their own regulatory authorisations. Use of the CashXChain platform does not constitute a financial services relationship with CashXChain UG or CashXChain Inc.
2. Operating Model
CashXChain operates as a Software-as-a-Service (SaaS) orchestration layer across three architectural layers:
- Layer 1 — Client Layer: User interface (web/mobile) for dashboards, transaction inputs, and KYB onboarding.
- Layer 2 — Instruction Layer: CashXChain backend, responsible for preparing transaction instructions, attaching compliance metadata, and routing to partners.
- Layer 3 — Execution Layer: Regulated partners responsible for custody, authorisation, compliance checks, and transaction execution.
CashXChain does not hold private keys, does not custody fiat or crypto assets, and does not execute or authorise transactions. All fund movements occur exclusively within partner-controlled infrastructure.
3. MiCA — Zero-Custody Model
Under Regulation (EU) 2023/1114 (MiCA), Article 3(1)(17) defines “custody and administration of crypto-assets on behalf of clients” as a regulated crypto-asset service. The regulatory test is functional and based on effective control or disposal authority over user assets. CashXChain’s architecture is designed to remain outside this definition:
- No private keys or signing capabilities are held within CashXChain systems.
- No fiat or crypto assets are held or controlled by CashXChain.
- All transaction execution requires independent partner authorisation.
- CashXChain cannot initiate, freeze, redirect, or reverse transactions.
The Removal Test further confirms this positioning: if CashXChain infrastructure is removed, user funds remain safe and accessible through partner systems. Accordingly, CashXChain does not meet the functional criteria for custody or disposal authority under MiCA Article 3(1)(17).
4. Partner Structure & Regulatory Allocation
CashXChain relies on regulated partners to perform all financial services. These partners act as the formal providers of regulated activities, including custody, payment execution, and crypto-asset transfers. Regulatory responsibilities are allocated as follows:
Partners (Layer 3)
- Custody of fiat and crypto assets.
- Transaction execution and settlement.
- AML/CFT compliance and sanctions screening.
- Travel Rule compliance.
CashXChain (Layer 2)
- Preparation of transaction instructions.
- Attachment of compliance metadata.
- Routing to appropriate partners.
- Data aggregation and reporting.
This allocation is reinforced through contractual agreements that define partners as regulated service providers, clear liability allocation for custody, execution, and compliance, and technical enforcement ensuring that no override or bypass of partner decisions is possible.
5. Travel Rule — EU Transfer of Funds Regulation
Regulation (EU) 2023/1113 (Transfer of Funds Regulation) extends Travel Rule obligations to crypto-asset transfers. Articles 14–16 require that originator and beneficiary information accompany transfers between service providers.
Partners are responsible for the collection and verification of Travel Rule data, transmission of data to counterparties, and compliance with regulatory requirements.
CashXChain is responsible for structuring and attaching the required data fields in instruction payloads and for ensuring data integrity and completeness. CashXChain does not verify, transmit, or enforce Travel Rule compliance independently; all obligations remain with executing partners.
6. AMLD6 — Anti-Money Laundering and KYB
Directive (EU) 2018/1673 (AMLD6) establishes criminal liability for money laundering offences, including liability for legal persons (Article 7) and aiding and abetting (Article 6).
Partners are responsible for KYC/KYB verification and approval, transaction monitoring and sanctions screening, and suspicious activity reporting.
CashXChain is limited to collecting and structuring KYB/KYC data and transmitting that data to partners. CashXChain does not perform regulated AML functions. Its systems are designed so they cannot facilitate the circumvention of partner compliance controls and so that all data flows are accurate, complete, and auditable.
7. Technical & Contractual Safeguards
To maintain its position outside the regulatory perimeter, CashXChain enforces strict technical and contractual safeguards:
- Maintain zero custody and zero disposal authority at all times.
- Ensure that no private keys, signing capabilities, or fund access exist within CashXChain systems.
- Enforce strict separation between the Instruction Layer and the Execution Layer.
- Require independent partner authorisation for all transactions.
- Continuously validate the Removal Test across all system changes.
- Ensure that partners retain full control over compliance decisions and execution.
- Maintain complete audit logs and traceability of all instruction flows.
- Ensure accurate and complete transmission of compliance data, including Travel Rule requirements under Regulation (EU) 2023/1113.
- Prevent any system design that could bypass or weaken partner AML controls.
- Conduct periodic technical and legal reviews to ensure ongoing compliance.
8. Group Structure
CashXChain UG (haftungsbeschränkt) and CashXChain Inc. (Delaware, USA) are affiliated entities under common founder leadership that operate in close cooperation. CashXChain UG conducts all commercial operations, partner agreements, and product services. A reorganisation is planned under which CashXChain UG will become a wholly owned subsidiary of CashXChain Inc.; until the reorganisation is completed, CashXChain Inc. holds no equity in CashXChain UG. CashXChain Inc. does not currently conduct commercial operations, provide services, enter into customer relationships, or engage in any regulated activities directly.
9. Conclusion
CashXChain’s architecture supports a defensible position outside the scope of MiCA CASP regulation, based on a strict zero-custody and zero-disposal-authority model. All regulated financial activities are performed by licensed partners, while CashXChain operates as a technology orchestration layer. This positioning is maintained through continuous technical validation, contractual safeguards, partner governance, and periodic legal review.
Last updated: 5 May 2026. For corporate registration details, see our Imprint.