Regulation on Crypto Assets Markets: MiCA

Regulation on Crypto Assets Markets: MiCA

On April 20th, the Regulation on Markets in Crypto Assets was finally approved by the European Parliament, becoming the world’s first regulatory framework that governs crypto assets.

This innovative instrument aims to provide guarantees to investors and consumers when interacting with crypto assets, attempting to establish a legal framework that aligns with the digital era and the practical reality of the population.

This new regulation establishes uniform requirements for issuing cryptocurrencies and their admission to crypto asset trading platforms and crypto asset service providers. Excluded from its application are unique and non-fungible crypto assets (NFTs), as well as financial instruments (Security Tokens) or electronic money, among others (Art. 2 MiCA), as these have already been regulated under other norms.

What changes does it bring?

MiCA differentiates between asset-referenced crypto assets and e-money tokens and those that are not, providing different requirements for their issuance or trading.

Among the novelties, we can find:

One of the obligations for crypto asset issuers is the need to create and publish a Whitepaper. The Whitepaper is a technical document that contains all relevant information about the issuer and the offering of crypto assets. MiCA now establishes the mandatory creation and publication of a Whitepaper for each intended crypto asset issuance, detailing all the necessary information to be included. Additionally, MiCA distinguishes the requirements for this Whitepaper, establishing a simple notification to the Competent Authority of each country for crypto assets that are not asset-referenced or e-money tokens. For asset-referenced or e-money tokens, the Whitepaper must be included in the authorization of their issuance. In both cases, any modifications to the Whitepaper must be notified before implementing changes to the use or functioning of the crypto assets.

Authorization for crypto asset service providers: While these providers previously required registration to operate, MiCA upgrades this to an authorization that involves additional requirements and technical, organizational, and compliance measures on the part of the provider. Furthermore, MiCA allows operating throughout the European Union without the need for authorization in each jurisdiction. Obtaining authorization in one EU country is sufficient, serving as a European Passport, as the authorization requirements are standardized across the European Union. This is one of the major novelties of this Regulation.

Measures against market manipulation and for the prevention of money laundering: MiCA dedicates an entire section to these effects, determining several measures to prevent market manipulation and the occurrence of money laundering and terrorist financing crimes. In this way, it aims to provide security to investors and address the common occurrence of money laundering using crypto assets.

In summary, MiCA establishes the rules of the game for all crypto asset operators, unifying the regulation and providing greater security to investors and consumers. It imposes a set of requirements on these operators, which include prudential and precautionary measures to prevent events such as the collapse of FTX and others from occurring again.

Regarding its implementation, different dates are established, with applicability set for 12 months after its entry into force for Titles III and IV (issuance of e-money and asset-referenced crypto assets).At Letslaw by RSM, we can assist you in launching your blockchain-based company, as we have extensive experience in managing matters related to crypto assets.