After the European Union (EU) financial regulator released its first set of proposals on the regulation of crypto asset markets (MiCA), it added a warning.
On 12 July, the European and Securities Markets Authority (ESMA) published a consultation document.
ESMA has published a
consultation package under the Markets in Crypto-Assets Regulation #Mica: https://t.co/MD2tdKi8v9
input on regulations for crypto asset service providers on
authorization, identification and management of conflicts of interest
September 20 pic.twitter.com/mhiYNxFWA9
— ESMA – EU Securities Markets Regulator
(@ESMAComms) July 12, 2023
On the same day, ESMA President Verena Ross warned consumers in the EU that “there will be no such thing as a secure crypto asset”. Ross warned consumers that cryptocurrencies are still risky.
ESMA President, #Verena Ross: This […] is an important milestone for ESMA in the implementation of the #Mica frame. It translates our ambition to establish high regulatory standards for crypto-asset-related activities in the EU into concrete requirements. https://t.co/MD2tdKi8v9 pic.twitter.com/5rNXGdjrQT
— ESMA – EU Securities Markets Regulator
The consultation paper asks all stakeholders for comment on regulatory and technical standards. The regulator also asked for confidential details about crypto companies’ expected earnings, the number of whitepapers and the use of on- and off-chain trading.
Applicants must demonstrate that they will not mix client funds and crypto and will not use the assets for the company’s own account. They must also provide information about the security of their ICT system and the underlying distributed ledger technology.
Participants submit their answers by 20 September at the latest.
The regulator has said it will begin its second round of consultations in October, which will cover sustainability and record-keeping. The third round will take place in early 2024 and will focus on how foreign companies can serve EU consumers.
The new MiCA proposals also require crypto service providers to handle customer complaints in the specified manner. The proposals also include conflict of interest rules in the virtual asset sector.
EBA asks stablecoin issuers to get ready for MiCA
MiCA was approved by the European Parliament in April. The EU Council also adopted it unanimously in May. It will enter into force in 2024 and be fully implemented by 2025.
The law gives crypto exchanges and wallet providers the ability to operate in the bloc of 27 countries with a single license.
On 12 July, the European Banking Authority (EBA) also issued a press statement.
#EBA encourages institutions involved in asset reference token (ART) or electronic money token (EMT) activities to take timely preparatory steps for the application of #MiCAR
https://t.co/WMCw4iG9zo#crypto pic.twitter.com/m8azEPZbvl
— EU Banking Authority – EBA
It urged stablecoin issuers to prepare for the MiCA regulation. This way there will be no urgency to try to adhere to the guidelines when they are implemented.
