MiCA Crypto Regulation

MiCA - Markets in Crypto-Assets Regulation

The Markets in Crypto-Assets Regulation (MiCA) provides a comprehensive regulatory framework for crypto-assets in the European Union, coming into full effect in 2024.

Scope

Crypto-Assets Covered

1. Asset-referenced tokens (ARTs)

   • Stable value referencing multiple assets
   • Like "baskets" of currencies or commodities

2. E-money tokens (EMTs)

   • Single fiat currency reference
   • Similar to electronic money

3. Other crypto-assets

   • Utility tokens
   • Other tokens not meeting ART/EMT criteria

Excluded

• Financial instruments under MiFID II
• Deposits
• Securitisation positions
• Insurance products
• CBDCs

Crypto-Asset Service Providers (CASPs)

Services Requiring Authorisation

1. Custody and administration
2. Operation of trading platform
3. Exchange of crypto-assets for funds
4. Exchange of crypto-assets for other crypto-assets
5. Execution of orders
6. Placing of crypto-assets
7. Reception and transmission of orders
8. Providing advice
9. Providing portfolio management
10. Providing transfer services

Authorisation Requirements

• Legal entity in EU
• Minimum capital requirements
• Fit and proper management
• Governance arrangements
• Complaint handling procedures
• Conflicts of interest policy

Stablecoin Requirements

Asset-Referenced Tokens

• Authorisation required
• Reserve of assets
• Redemption rights
• Prudential requirements
• Significant ART additional requirements

E-Money Tokens

• Issued by credit institution or EMI
• Redemption at par value
• Funds safeguarding
• Investment rules for reserve

Significant Tokens

Enhanced requirements for tokens with:

• Large customer base
• High market capitalisation
• High transaction volumes
• Cross-border significance

Market Abuse

Prohibited Practices

• Insider dealing
• Unlawful disclosure of inside information
• Market manipulation

Disclosure Requirements

• Inside information
• Manager transactions
• Takeover bids

Consumer Protection

White Paper Requirements

• Issuer information
• Project description
• Rights and obligations
• Technology used
• Risks

Marketing Requirements

• Fair, clear, not misleading
• Risk warnings
• Consistent with white paper

Sustainability

Environmental Disclosures

• Consensus mechanism information
• Energy consumption
• Environmental impact