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MiCA – Regulation of the European Parliament and of the Council on Markets in Crypto-assets, and amending Directive (EU) 2019/1937

MiCA is the European regulation that regulates the crypto-assets market.

The draft of MiCA was filed in the European legislation procedure in 2020 by the European Commission. Currently, it is in the legislative procedure before the European Parliament, where it is expected to be adopted and published in the Official Journal of the European Union in the second quarter of 2023.

MiCA is expected to enter into force 20 days after its publication in the Official Journal of the European Union and to be applied 18 months later. We can thus expect its implementation sometime at the beginning of 2025. Since it is a regulation that is a binding European legislative act, it does not need to be implemented in Slovenia, but it is applied directly throughout the European Union after its implementation.

The main purpose of MiCA is to unify and regulate the crypto-assets market and ensure a high level of consumer protection.

MiCA regulates the following four areas:

Area 1

The process of issuing crypto-assets and listing crypto-assets on a trading platform.

In this regard, MiCA regulates:

  • the content and format of the whitepaper,
  • informing, publishing and changing the whitepaper,
  • content and format of marketing communications,
  • the right to withdraw from the contract, and
  • obligations and responsibilities of the issuer.

Area 2

Stablecoin and e-money tokens where MiCA regulates:

  • the entities that must obtain authorisation for the public offering of stablecoins or e-money tokens and their listing on the exchange,
  • the content of the application for the issuance of a authorisation and the procedure for issuing the authorisation,
  • obligations and operations of stablecoin and e-money token issuers, and
  • obligations regarding the management of issuers’ funds.

Area 3

Authorisation of crypto-asset service providers where MiCA regulates:

  • conditions and procedure for authorization issuance, and
  • obligations and operating conditions of the crypto-asset service providers.

Among the crypto-asset service providers, MiCA includes entities engaged in:

    • custody and administration of the crypto-assets on behalf of third parties,
    • operation of a trading platform for crypto-assets,
    • exchange of crypto-assets against funds or exchange of crypto-assets against other crypto-assets,
    • execution of orders for crypto-assets on behalf of clients,
    • placing of crypto-assets,
    • reception and transmission of orders on behalf of third parties, and
    • advice on crypto-assets and portfolio management of crypto-assets.

Area 4

MiCA also introduces rules regarding the prevention of market abuse by regulating insider information disclosure obligations and prohibiting insider trading, and conduct that constitutes the market manipulation of crypto-assets.

Exceptions: At the same time, it is important that MiCA excludes mining, NFTs, DeFI, free crypto tokens, small crypto-asset issuances (issuances in amount up to EUR 1 million in 12 months or issuances to less than 150 people per Member State) from its regulation. At the same time, it does not interfere with crypto-assets, which represent financial instruments that are subject to pre-existing financial regulations.

At our law firm, we will continue to closely monitor the further development of the regulation of crypto-assets and share our knowledge in this area with our clients.

In the meantime, we are happy to share with you a one-page handout summary of the main information on MiCA, available for download.