The European Securities and Markets Authority (ESMA) posted two consultations on crypto this week—one consultation on reverse solicitation and another on the classification of crypto-assets as financial instruments.
The European Union (EU) has approved bespoke rules for crypto under MiCA or Markets in Crypto Assets regulation. ESMA is working to craft rules to adhere to the law.
For the classification of crypto-assets as financial instruments, ESMA is looking for feedback on the potential for crypto to be deemed financial instruments. The goal is to bridge MiCA and Markets in Financial Instruments Directive II (MiFID II). The goal is to foster flexible conditions for National Competent Authorities (NCAs) to determine whether a crypto-asset can be classified as a financial instrument.
In regard to the reverse solicitation exemption and the supervision practices that NCAs may take to prevent its circumvention, the proposed guidance adheres to the provision that crypto-asset services by a third-country firm are limited under MiCA to cases where the client is the exclusive initiator of the service. Thus, a firm cannot bypass MiCA with the exemption.
The two consultations are available below. The deadline for comments is April 29, 2024.
- Consultation Paper on the draft guidelines on reverse solicitation under the Markets in Crypto Assets Regulation (MiCA)
- Consultation paper on the draft Guidelines on the conditions and criteria for the qualification of crypto-assets as financial instruments
