European regulator releases consultative paper on MiCA standards for crypto asset service providers

The European Securities and Markets Authority (ESMA), the European Union’s markets regulator, released a consultative paper on Markets in Crypto-Assets (MiCA) mandates on July 12. It was the first of three consultative packages the agency expects to publish and concerns technical specifications for crypto asset service providers (CASPs).

Entities that are already licensed are presumed under MiCA to be “generally capable of providing crypto-asset services,” but they will be required to provide additional information in the form of notifications to the national competent authorities (NCAs) of the country they are registered in. The paper sought feedback on regulatory technical standards and implementing technical standards for notifications from CASPs.

ESMA also sought feedback on regulatory and technical standards for CASP authorization applications, handling complaints, and managing and preventing conflicts of interest. Finally, comments are open on the ESMA regulator’s technical standards for disclosures to NCAs by entities planning to acquire shares in a CASP.

Responses to the paper are due by Sept. 20. A draft of the finalized standards will be submitted to the European Commission by June 30, 2024, as mandated by MiCA. The second consultative package will be released in October and the third in the first quarter of 2024, timed to meet the deadlines set for ESMA in MiCA.

ESMA published consultation package under the Markets in Crypto-Assets Regulation #MiCA: https://t.co/MD2tdKi8v9

input on rules for crypto-asset service providers on authorisation, identification and management of conflicts of interests complaints

20 September pic.twitter.com/mhiYNxFWA9

— ESMA – EU Securities Markets Regulator (@ESMAComms)

July 12, 2023

In addition to feedback, ESMA posed four more general questions to respondents. It explained:

“ESMA aims to gather more insight on respondents’ current and planned activities, as a fact-finding exercise to better understand the EU crypto-asset markets and their future development.”

The questions concerned such things as expected turnover, the number of white papers respondents plan to publish and their use of on-chain and off-chain trading.

MiCA was approved by the European Parliament on April 20. It will come into force in three levels in 2024 and 2025.

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