Generally, MiCA will have the greatest impact on issuers, service providers, and trading venues. Crypto issuers, in particular, will have to comply with an information obligation and publish a white paper on their products which must be submitted to the relevant financial supervisory authority. Further, MiCA determines that crypto service providers, such as crypto-asset custodians and operators of trading venues, must have a registered office in a Member State if they want to offer their products and services in the European Union. For smaller companies and fintechs, the regulation could cause certain disadvantages. In Member States where the market has been virtually unregulated to date, companies face high costs due to, for example, the acquisition of licenses or the costs incurred in connection with reporting requirements or a secure IT infrastructure.
Reed Smith Client Alerts
In September 2020, the European Commission published a draft regulation on crypto-assets. The so-called ‘Markets in Crypto-Assets Regulation’ (MiCA) is intended to ensure an unambiguous handling of cryptocurrencies and regulate crypto-asset services and crypto-assets which are not already subject to existing European regulation. The current patchy legal framework in different European countries makes it difficult for companies to start a business in this still very new area. In addition, the different national regulations create unequal opportunities for market participants.