MiCA Final Guidance Announced In Preparation For December 30 Launch

Key Points:

• The ESMA issued comprehensive guidelines to aid in implementing the EU’s Markets in Crypto-Assets (MiCA) regulations, effective December 30.
• The MiCA final guidance addresses reverse solicitation, crypto-asset transfers, and classification as financial instruments.

The European Securities and Markets Authority (ESMA) has released its final guidance to support the implementation of the European Union’s Markets in Crypto-Assets (MiCA) regulations, set to take effect on December 30 across the 27-member bloc.

Read more: ESMA Issues First Input To Give Feedback From Crypto Sector On New MiCA Law  

ESMA Issues MiCA Final Guidance for Implementation

The MiCA final guidance is concerned with the technical standards, the prevention of market abuse, and the definition of crypto-assets under the new regulatory framework.

In 18 months, ESMA produced more than 30 technical standards and guidelines with the European Banking Authority. Those are efforts to bring into sharp focus and ensure harmonization for what would be the last moments of the EU facing the full enforceability of MiCA, a crowning regulatory regime tailor-made for the cryptocurrency market.

Another important area of focus in the MiCA final guidance relates to reverse solicitation, where ESMA continued to emphasize that this MiCA exemption should be interpreted as being narrow in scope.

The exemption allows CASPs to circumvent MiCA provisions only if the service is exclusively initiated by the client. ESMA warned against leveraging this loophole to bypass the wider ramifications of regulation.

Crypto Regulations Are to Be Harmonized Across the E

ESMA also outlined guidelines for crypto-asset transfers to bolster investor protection. These recommendations require CASPs to implement robust policies and procedures to safeguard clients during transactions.

Another important aspect of the guidance involved the categorization of crypto assets as financial instruments. ESMA developed conditions that, if satisfied, may bring certain crypto assets within the scope of the MiFID II regime. With MiCA about to go live, many EU states have not yet finished passing the required legislation to apply the regulations.