2023 Fintech and Financing Conference & Expo

MiCAR: EU Crypto Regulation in the Making

Linklaters | | Oct 13, 2022

Cryptoasset regulation - MiCAR:  EU Crypto Regulation in the MakingTwo years since the draft text was first released, the EU’s flagship Markets in Cryptoassets Regulation has now been finalised and is set to become law.

See:  EU agrees on landmark MiCA rules putting pressure on UK and US to regulation crypto assets too

  • Under MiCAR, in-scope cryptoassets will be categorised according to their perceived risk as one of:
    • EMTs: e-money tokens, which are broadly stablecoins pegged to one official currency
    • ARTs: asset-referenced tokens, which are broadly stablecoins pegged to more than one official currency or other assets
    • Other: cryptoassets which are not EMTs or ARTs and so are subject to lighter-touch requirements.
  • DeFi: Services provided in a “fully decentralised manner” should not be in the scope of MiCAR. However, MiCAR will apply to intermediaries that perform their services as part of wider DeFi arrangements.
    • For example, if a cryptoasset is issued to the public on a decentralised basis, the operator of the trading platform must produce the white paper for the cryptoasset and will need to be considered on a case-by-case basis.
  • Who must comply: The final version of MiCAR applies to both issuers of cryptoassets offering their products into the EU and cryptoasset service providers (CASPs). CASPs must seek authorisation to offer their services in the EU. Having a crypto licence means applying rules on, for example, conduct, capital and safeguarding, as well as service-specific requirements.

See:  Brookings: The Future of Crypto Regulation (On Demand and Transcript)

  • Alongside activities such as crypto custody and exchange of cryptoassets (see our previous blogpost), the following will also be regulated under MiCAR:
    • providing transfer services for cryptoassets on behalf of third parties
    • providing portfolio management on cryptoassets.
    • Custodians - incidents attributable to the custodian, although the burden is on the custodian to show that the loss happened independently of its services and operations. Their liability is also capped at the market value of the cryptoasset lost at the time the loss occurred.
  • What's next? It is expected to enter into force early in 2023 but not start to apply until 2024. Generally MiCAR will apply from 18 months after entry into force although the rules for stablecoins (i.e. ARTs and EMTs) will start to apply after 12 months.

Continue to the full article --> here


NCFA Jan 2018 resize - MiCAR:  EU Crypto Regulation in the MakingThe National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org

Latest news - MiCAR:  EU Crypto Regulation in the MakingFF Logo 400 v3 - MiCAR:  EU Crypto Regulation in the Makingcommunity social impact - MiCAR:  EU Crypto Regulation in the Making

Support NCFA by Following us on Twitter!







NCFA Sign up for our newsletter - MiCAR:  EU Crypto Regulation in the Making




 

Leave a Reply

Your email address will not be published. Required fields are marked *

twenty − 9 =