CRYPTO REGULATION: THE INTRODUCTION
OF MICA INTO THE EU REGULATORY
LANDSCAPE
Just over two years after it was first proposed, the agreed text of
the new Markets in Crypto-assets Regulation (MiCA) has been
released. MiCA aims to create an EU regulatory framework for
the issuance of, intermediating and dealing in, cryptoassets. It
will introduce licensing and conduct of business requirements as
well as a market abuse regime with respect to cryptoassets.
With parts of MiCA anticipated to come into force from spring
2024, we look at what issuers of stablecoins and other
cryptoassets, custodians and other crypto service providers
need to know now.
Overview
MiCA creates a broad regulatory framework for cryptoassets in the EU which:
• regulates the issuance of, and admission to trading of, cryptoassets, including
transparency and disclosure requirements;
• introduces licensing of cryptoasset service providers, issuers of asset-referenced
tokens and issuers of electronic money tokens;
• clarifies the regulatory obligations applicable to issuers of asset-referenced
tokens, issuers of electronic money tokens and cryptoasset service providers,
including consumer protection rules for the issuance, trading, exchange and
custody of cryptoassets;
• strengthens confidence in cryptoasset markets by creating a market abuse
regime prohibiting market manipulation and insider dealing; and
• clarifies the powers, including the co-operation and sanctions framework,
available to competent authorities.
The requirements under MiCA are broadly similar to requirements under the existing
EU financial services regimes, including requirements relating to disclosures,
governance and licensing. However, as there are nuances between MiCA and the
existing regime, firms engaging in cryptoasset activities will need to consider
whether they will fall under the MiCA definition of “cryptoassets” or whether they are
subject to another regulation, to ensure that they adhere to the appropriate
regulation, in particular for transferable securities which may constitute a financial
instrument falling under the Markets in Financial Instruments Directive II (MiFID II) as
further discussed below
