What is MiCAR / MiCA?

The Markets in Crypto Assets Regulation (also known as “MiCAR“ or “MiCA“) is an EU-wide regulation relating to crypto assets, which was adopted by the European Parliament on 20.04.2023 as part of the European “Digital Finance Package” published by the European Commission on 24.09.2020. MiCA“ genannt) ist eine EU-weite Regulierung in Bezug auf Kryptowerte, welche am 20.04.2023 vom europäischen Parlament als Teil des am 24.09.2020 veröffentlichten europäischen „Digital Finance Packages“ der europäischen Kommission verabschiedet wurde.
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In order to carry out activities under MiCAR, market participants must go through either a notification procedure or an ordinary authorization procedure. In addition, Member States may also offer a simplified authorization process.
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A permit under MiCAR entitles the holder to “passporting” the license. This means that the service may be offered throughout the EU, provided that the conditions have been met by the owner.

What are the objectives of MiCAR / MiCA?

In particular, MiCAR pursues the following objectives:
1. Ensuring legal certainty by creating a solid legal framework for crypto assets;
2. Supporting innovation and fair competition to promote the development of crypto assets by creating a secure and proportionate framework;
3. Protecting consumers, investors and market integrity, taking into account the risks associated with crypto assets;
4. Ensuring financial stability, including protective measures to address potential risks.

Which companies are affected by MiCAR / MiCA?

MiCAR is relevant for issuers of crypto assets and for so-called companies that provide crypto asset services for customers. Such service providers are referred to as “Crypto Asset Service Providers” or “CASPs” under MiCAR and include the following companies:
1. Crypto custodians;
2. Operators of trading platforms;
3. Companies that exchange FIAT for crypto assets or between different crypto assets;
4. Companies that carry out orders for customers (e.g. financial commission business);
5. Companies that carry out the placement of crypto assets;
6. Companies that receive and submit orders for customers (e.g. investment brokers);
7. Investment advisor;
8. Portfolio manager;
9. Companies that carry out transfers of crypto assets for customers.

What types of crypto assets does MiCAR / MiCA include?

The MiCAR distinguishes between the following types of crypto values:

E-money tokens:
Crypto assets whose value is derived from a single official currency.

Asset-referenced tokens:
Crypto assets that are not e-money tokens and that aim to maintain a stable value by reference to another value or a right, or a combination of these, including one or more official currencies.

Utility token:
Crypto assets designed as a mean of providing digital access to goods and services provided exclusively by their respective issuers.

Tokens that are classified as other crypto assets:
Tokens that are not classified as asset-referenced tokens or e-money tokens.

What regulatory overlaps exist?

The MiCAR, which applies at European level, offers an extended scope compared to existing German regulations. The early identification of relevant regulatory requirements for their own business model is therefore essential for market participants.

What types of requirements does the MiCAR / MiCA have?

Companies subject to MiCAR must meet requirements in the following areas, depending on the type of their activities:
1. Legal form and registered office;
2. Supervisory approval requirement;
3. Consumer protection legislation;
4. Asset reserve requirements;
5. Organizational controls (e.g. compliance, conflicts of interest, complaint management, service provider management, etc.)
6. Capital requirements;
7. Management and owner requirements;
8. Preparation of white papers;
9. Transparency and disclosure requirements;
10. Measures to prevent market abuse and insider trading.

The timeline of MiCAR / MiCA