MiCA, a new law on the cryptο markets, is targeted to set up new, comprehensive legal and regulative mechanisms to bring digital assets, along with CASPs, within the remit of the EU administration of justice on monetary operations. A specified by the lawmakers, the rules applicable to providers of crypto asset services will be enforceable within the EU with no necessity for local-level lawful acts. This new establishment is in line with client safeguarding standards and creating efficient and harmonized access to cryptos across the single platform. When it comes to the application of new law, it concentrates on specific types of cryptos that are now not encompassed by enforceable charters – i.e. it does not refer to NFTs classified as financial tools.
Overview of rules applicable to CASPs
First thing first, on June 30, 2022, the EU Council Presidency and the EuroParliament approached a provisional agreement on the scope and direction of the MiCA. It was the first try of EU legal standard-setters to establish single standards for crypto within the EU and address vulnerabilities that cryptocoins may entail while fostering new initiatives. Once enacted, the law is expected to become enforceable 1,5 years after it’s coming into effect.
In accordance with the law, cryptο-asset services prοviders (hereinafter mentioned as CASPs) should only be legal persons with registered offices in one of the EU countries. They should be authorized as CASPs.
The approved status as a CASP will be lawful within the EU and must enable CASPs to deliver the offers for which they have obtained their approvals, either under the principle of Right of Establishment, via a representative office, or under the freedom to deliver offers.
CASPs must operate based on the EU standards of honesty, fairness, and professionalism with their clientele and potential clientele and will deliver their clientele transparent, honest data, particularly in their commercial communicative purposes, which must be defined as such. CASPs are liable for warning their clientele of the risks related to the acquisition of cryptos. They must ensure their pricing policies are publicly accessible by listing them on their websites.
CASPs must ensure prudential guarantees of having the below-mentioned 2 amounts are in place:
- The quantity of the minimum capital obligation applicable to it, subject to the character of the services it delivers, either:
- For the services of receiving, transmitting and executing orders, advisory services, and placing cryptocoins on behalf of clientele: 50,000 EUR.
- For custodian and administrator services: 125,000 EUR.
- For running a platform for buying/selling cryptocoins, exchanging cryptocoins for government-issued money or other cryptocoins: 150,000 EUR.
- One fourth of the preceding year’s costs that do not change with changes in business activity levels (salaries, rent, property taxes, depreciation of assets, and government licenses). Such costs are recalculated once a year.
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