REGULATION OF CRYPTO ASSET MARKETS (MiCA)

Since the first theoretical proposal of bitcoin, in 2008, the importance and diversity of cryptoassets has not stopped growing.

The MiCA (Markets in CryptoAssets) regulation is developed within the European Commission's Digital Finance Strategy Measures Package, launched in September 2020, with the promotion of regulation on cryptoassets being one of its three axes.

The MiCA cryptoasset markets regulation establishes uniform rules for the EU market. This regulation aims to regulate and supervise the digital asset market in the European Union, providing a clear and secure legal framework for investors and operators. With MICA, the aim is to promote innovation and competition in the cryptoasset market, while protecting consumers and preventing money laundering and terrorist financing. This regulatory framework seeks to create a favorable environment for the development of blockchain technology and decentralized finance, thus boosting economic growth and the adoption of digital assets in the region.

From the regulator's perspective, cryptoassets affect four key dimensions of financial supervision. The MiCA Regulation aims to establish a framework that guarantees the protection of these dimensions: financial inclusion, stability, integrity and consumer protection. This regulation defines the fundamental concepts of the standard, the regime for issuing cryptoassets, as well as the rights and obligations related to the provision of services in this area. It also includes specific provisions to prevent abuse in the market and details the functions of the competent authorities in relation to cryptoassets.

The approval of MiCA will have repercussions for various actors in the financial market. For entities that operate within the cryptoasset ecosystem, this standard establishes a legal framework to which those that offer services or carry out emissions in the European Union must comply. On the other hand, traditional financial institutions will be forced to reconsider their strategy towards cryptoassets after the implementation of the regulation.

The provisions of the MiCA Regulation will come into force on December 30, 2024, except for those related to asset-referenced tokens and e-money tokens, which will begin to apply on June 30, 2024.

Financiasystem-eu.io's value proposition is based on the firm's regulatory experience, its specialized knowledge of digital assets and its technical and functional understanding of the underlying technology.

IMPLEMENTATION OF MICA MEASURES

Consultation package 1

The first consultation package will be published in July 2023. This package includes technical standards for the following mandates:

• Article 60(13): Regulatory rules on the content of the notification of selected entities to NCAs

• Article 60(14): ITS on forms and templates for the notification of entities to NCAs

• Article 62(5): RTS on the content of the application for authorisation for CASP

• Article 62(6): ITS on forms and templates for the application for authorisation for CASP

• Article 71(5): RTS on the complaint handling procedure

• Article 72(5): RTS on management and prevention, disclosure of conflicts of interest

• Article 84(4): RTS on information requirements for the intended acquisition

Consultation package 2

The second consultation package is expected to be published in October 2023. This package will likely cover all remaining mandates with a 12-month timeframe, including:

• Sustainability indicators

• Business continuity

• requirements​

• Trading transparency data and order book recordkeeping

• Recordkeeping requirements for CASPs

• Classification, templates and format of cryptoasset white papers

• Public disclosure of insider information.

Consultation package 3

The third and final consultation package is expected to be published in the first quarter of 2024. This package will likely cover all remaining mandates with an 18-month timeframe, including:

• Qualification of cryptoassets as financial instruments

• Monitoring, detection and reporting of market abuse

• Investor protection:

• Reverse solicitation

• Suitability of client portfolio management and advisory services

• Policies and procedures for cryptoasset transfer services, including client rights.

• System resilience and security access protocols.

EXPLORE REGULATORY EXCELLENCE WITH MiCA

Mandatory protocol completion carries significant legal implications for investors. It is crucial that they understand the consequences of failing to comply with this requirement, as they could face legal and financial penalties. Therefore, it is essential that they take the necessary steps to ensure compliance with the protocol and avoid any legal issues in the future. Furthermore, it is advisable to seek legal advice to ensure that they are following all procedures properly and protect their interests as investors. Protocol completion is a crucial step in the investment process, and it is important to approach it seriously and responsibly.

Mandatory completion of the protocol and legal implications

STRESS THE IMPORTANCE OF COMPLETING INITIATED PROTOCOLS WITHOUT EXCEPTION. FAILURE TO DO SO NOT ONLY VIOLATES COMPANY POLICY BUT ALSO CARRIES SIGNIFICANT LEGAL RAMIFICATIONS, INCLUDING POSSIBLE LEGAL ISSUES WITH THE RESPECTIVE GOVERNMENTAL AUTHORITIES OF EACH NATION.

LEAVING PROTOCOLS INCOMPLETE POSES SUBSTANTIAL RISK, WHICH COULD RESULT IN ACCOUNT SUSPENSION, LEGAL SANCTIONS AND CLASSIFICATION AS MONEY LAUNDERING ACTIVITY. IT IS IMPERATIVE THAT ALL PROTOCOLS BE CONCLUDED DILIGENTLY AND PROMPTLY TO AVOID SUCH CONSEQUENCES.

WE TRUST THAT EACH OF YOU RECOGNIZE THE SERIOUSNESS OF THIS MATTER AND ADHERE STRICTLY TO THE ENTITY´S PROTOCOLS AND LEGAL REQUIREMENTS.

Compliance with the protocol for the acquisition of cryptocurrency assets

Member States will have the option to implement “transitional measures” (Article 143 of MiCA) that would allow entities or firms that already provide crypto-asset services under the applicable law in their jurisdictions to continue doing so during the transition phase of MiCA (i.e. the 18-month period after full implementation in December 2023). These transitional measures include:

• A GRANDFATHER CLAUSE ART. 143 (3)- ALLOWING ENTITIES THAT PROVIDE CRYPTO-ASSET SERVICES UNDER NATIONAL LAWS APPLICABLE BEFORE 30 DECEMBER 2023 TO CONTINUE DOING SO UNTIL 1 JULY 2026 OR UNTIL THEY ARE GRANTED OR REFUSED A MiCA AUTHORISATION.

• A SIMPLIFIED AUTHORISATION PROCEDURE ART. 143(6) - FOR ENTITIES THAT WERE ALREADY AUTHORISED UNDER THE APPLICABLE NATIONAL LAW ON 30 DECEMBER 2023 TO PROVIDE CRYPTO-ASSET SERVICES.

SECURITY AND SAFETY

Avoiding scams in the cryptocurrency space is paramount to protecting your investments and ensuring your financial security. Below we offer some essential tips that will help you prevent cryptocurrency scams.

Client information

Secure Wallets and Exchanges

Process automation

Data-driven innovation

Report suspected scams

Verify credentials

⚠️ Security Notice: Stay Vigilant against Scams and Fake Sites ⚠️

It is very important that you be alert to possible fraud and misleading websites. If you have any questions about the legitimacy of a platform or message, please do not hesitate to contact us immediately. Your safety is our main concern.

Remember not to share personal information or make payments without confirming it first!

You want to know more?

Mica is working on supervisory convergence during the transition phase, in parallel with the drafting of technical standards. This convergent approach with national competent authorities aims to ensure the alignment of supervisory expectations for crypto-asset service providers across EEA jurisdictions. The purpose is to promote consistent practices to be used after the entry into force of MICA, starting with the authorisation regime. This joint work seeks to establish a robust and consistent supervisory framework for entities offering crypto-asset services, during the MICA transition period, in order to ensure security and stability in the cryptocurrency market.

Supervisory convergence in the MiCA transition phase

More background on MiCA's transitional measures

Member states will have the option to implement “transitional measures” (Article 143 of MICA) that would allow entities or firms already providing crypto-asset services under applicable national law in their jurisdictions to continue doing so during the MICA transition phase (i.e. the 18-month period after full implementation in December 2024). These transitional measures include: a duty-free clause (Article 143(3)) – allowing entities providing crypto-asset services under applicable national law before 30 December 2024 to continue doing so until 1 July 2026 or until they are granted or refused a MICA authorisation. A simplified authorisation procedure (Article 143(6)) – for entities that were already authorised under applicable national law on 30 December 2023 to provide crypto-asset services.