MICA to RegRally: The Crypto Guide - European Regulatory Update, March 2024

Dear reader,

In this issue, we bring you a curated selection of significant developments from the European crypto regulatory landscape and invite you to a free initial consultation on MICA implementation with our experts. Please contact us at [email protected], as the time to prepare for licensing is now.

Stay tuned, as in the next few days, we will share a Global, Americas and Asia Crypto News Review issue.

We wish you a good read!

ESMA publishes new Q&As regarding the MiCA regulation’s implementation

ESMA’s Q&As cover a lot of important questions raised by the crypto market participants, including how the transitional period will affect the currently authorised crypto-asset service providers. Read more

ESMA publishes its newsletter with a focus on the MiCA regulation

The newsletter broad-strokes through the MiCA regulation by drawing attention to unsolicited investment advice prevalent on the social, the environmental impact evaluation that crypto-assets will be subject to if they’re listed on exchanges, etc. Read more

ESMA reiterates the applicable requirements for investment advice

The European Securities and Markets Authority (ESMA) and National Competent Authorities are raising awareness of requirements established by the Market Abuse Regulation (MAR), which apply when posting investment recommendations on social media. They are also warning about the risks of market manipulation in such publications. When posting on social media, transparency and accuracy are key, especially when making recommendations about investments. That is why, if you are a finance influencer, a technical expert, or someone with just an interest in financial investments, you need to be aware of the rules established under the MAR Framework and be able to recognise an investment recommendation. Read more

ESMA publishes a joint European Supervisory Authorities’ report on BigTech and its effect on financial services

The report covers multiple jurisdictions, including the pioneering US BigTech that usually guides future trends across the globe. The report identifies that BigTech directly influences the methods of providing financial services, including services relating to crypto-assets, e.g. crypto-asset exchanges acting as intermediaries for daily financial transactions. In addition, it draws the attention of innovative financial services in the context of crypto-assets, namely PayPal’s stablecoin (PYUSD), which was issued not by PayPal but by Paxos. At the same time, PayPal only leverages its commercial notoriety for the use of PYUSD. Read more

ESMA clarifies certain best execution reporting requirements under MiFID II

Even though the statement covers the nuances of the best execution policy in the context of MiFID II, its relevance extends to the MiCA regulation, which prescribes the necessity for such a policy in its preamble. The MiCA regulation states that CASPs providing a service of executing orders on behalf of its Clients needs to have in place and adhere to a “best execution” policy that should ensure the best results for their Clients. Accordingly, the contents of the best execution policy under MiFID could be adapted to CASP activities. Read more

Verena Ross, chair of ESMA, gave a speech on the sustainable and digital finance

The speech covered a multitude of different streams of financial market developments, including the development of crypto-asset regulations across the globe and in the EU with its MiCA regulation. In particular, V. Ross highlights that certain unfortunate turmoil that shaped the crypto-asset development could have been easily avoided if proper regulation had been in place. However, instead, the major flops of Terra Luna and FTX served as the paving stones for the necessity of regulation. Read more

The European Commission adopts 4 delegated regulations to the MiCA regulation

The delegated regulations provide legal certainty on the MiCA regulation and guidance on its implementation. In particular, the delegated regulations cover the imposition of fines by supervisory authorities (link), classification of ARTs and EMTs as significant (link), fees to be charged by EBA for significant ARTs and EMTs (link), and the conditions for the use of intervention powers of EBA and other competent authorities (link). Read more

Spain’s financial regulator publishes a list of unlicensed CASPs operating in the country

Even though in 2023, the number of CASPs registered in Spain grew by ~56%, some companies still provide crypto-asset services without a license. Read more

UK’s Law Commission published a consultation paper on the possible classification of crypto-assets

The intended effect of the draft Bill is to confirm that crypto-tokens, and potentially other assets such as voluntary carbon credits, can be recognised by the law as property. This will enable courts to determine several issues, including, for example, in the following situation: If digital assets are the subject of a legal dispute and there is a danger of their holder dissipating them before that dispute can be resolved, a court can, if these assets are classed as property, order a proprietary freezing injunction over them to prevent this. These remedies exist for things already recognised as property; it is an open question whether they are available in relation to digital assets. Read more

Free advice MiCA Questionnaire

Are you looking for Free Initial Advice on CASP Licensing under MiCA?

We've got you covered! We've just launched our MICA Free Advice Questionnaire. If you're seeking guidance on navigating CASP licensing according to MiCA, fill out the questionnaire, and our experts will contact you to discuss proper MICA implementation.

Don't miss out on this opportunity to ensure compliance with the latest regulations! Read more

Your experienced advisor,

ECOVIS ProventusLaw.