MiCA, or Markets in Crypto Assets, is the European Union’s rules to create an ecosystem where digital assets can innovate and evolve while providing a level of user protection.
Recently, ESMA [European Securities and Markets Authority] announced a second public consultation on the implementation of MiCA. ESMA was joined by EBA, and EIOPA or the European Supervisory Authorities (ESA)
The consultation is seeking feedback until January 24, 2023.
The consultation states:
“Adequate governance of financial institutions can only be achieved, if the persons who control or manage such institutions are fit and proper and if persons who are not fit and proper are effectively prevented from assuming such roles. To achieve such outcomes, fit and proper assessments by competent authorities are critical and, indisputably, access of these authorities to any relevant information is a basic condition for the success of such assessments.”
And;
Therefore the ESAs aim to “establish a system for the exchange of information relevant to such fit and proper assessments. ESAs are, therefore, not only strongly committed but also under the legal obligation to establish such a system. “
After this consultation, the ESAs hope to finalize the guidelines at the beginning of 2024.
Today, CI received an update from Global Digital Finance (GDF) which has submitted a comment letter on the consultation. GDF is an association advocating on behalf of the adoption of best practices for crypto and digital assets.
GDFs responses focused on these four categories:
- Greater clarity on sustainability indicators and sustainability disclosure obligations;
- Additional guidance on technical implementation for post trade requirements;
- A more precise scope for insider information; and
- Further consideration of the interplay of MiCA and other regulatory frameworks such as MiFID/MiFIR and DORA
Unlike the US where all digital assets are deemed to be securities or commodities, the EU is attempting to update regulations to provide legal certainty in the crypto sector which can incorporate new features and functionality not traditionally affiliated with securities. MiCA covers three types of crypto-assets: “asset-referenced tokens” (ART), “electronic money tokens” (EMT), and other crypto-assets not covered by existing EU law.