NewBalkans Law Office’s crypto legal team has been analysing one of the most significant developments in the realm ofcrypto-assets, one that could significantly impact the market and its participants. The European Parliament and theCouncil have put forth a Proposal for a Regulation on Markets in Crypto-assets(MiCA). accompanied by amendments to Directive (EU) 2019/1937. Today, we provide a brief overview of these changes and their potential implications.
Theproposed MiCA regulation aims to establish a more comprehensive framework forregulating and supervising crypto-assets in the European Union. Its new rulesare based on objectives such as enhancing investor protection, fosteringmarket integrity, and promoting financial stability within the crypto market.Harmonising rules and requirements within the Single Market is meant to address the challenges posed by the rapid growth of crypto-assets andensure a level playing field across the EU member states.
Keyelements of the proposal include:
- Definingand classifying different assets: MiCA introduces clearer definitionsbetween types of crypto-assets,distinguishing between financial instruments, e-money tokens, andasset-referenced tokens. This classification will determine the regulatoryscrutiny and legal requirements for each type of asset.
- Authorisingand supervising crypto service providers: MiCA establishes a more robustauthorization and registration process for crypto-asset service providers,such as trading platforms, custodian wallet providers, and token issuers.These entities will be subject to stricter operational and prudentialrequirements to ensure the protection of investors and the integrity ofthe market.
- Investorprotection: New rules on information disclosure, product governance, andsuitability assessments are designed to strengthen protections forinvestors – particularly retail investors. MiCA also introduces safeguardsagainst market abuse and insider trading in the crypto-asset market.
- Stablecoins:The proposal introduces specific requirements for entities issuingstablecoins,crypto-assets designed to maintain a stable value. Thesemeasures aim to enhance transparency, mitigate risks, and ensureappropriate safeguards for users.
- Cross-bordercooperation: In order to harmonise the highly cross-border crypto market,the proposal sets out new obligations amongst national authorities tocooperate. It also establishes a European Supervisory Authority to ensure consistent supervision and enforcementof crypto assets across the EU.
Itis worth noting that the proposed regulations are subject to the legislativeprocess and may undergo amendments and refinements. However, its introductionsignifies a significant step towards regulating the crypto-asset market andenhancing investor confidence within the European Union.
NewBalkans Law Office (www.newbalkanslawoffice.com) is highly experienced atnavigating the dynamic regulatoryenvironment and its influence on the cryptocurrency industry. Our expert teamclosely monitors this proposal’s development and its potential ramificationsfor our clients. We remain steadfast in our commitment to offeringspecialist guidance and unwaveringsupport as we watch the regulatory advancements take shape.
You can read more publications from the New Balkans Law Office at the links below.
NBLO takes part in IBA’s International Financial Law Conference
New Regulations for Investors in Bulgaria
Alternative Investment Funds as a Tool for Diversifying Investments
Bulgaria’s start-up visa: a route into EU markets
Benefits of Shareholders’ Agreements
How to prove my Source of Funds/Source of Wealth from crypto asset profits
Investor protection before the European Court of Human Rights