New MiCAR Guidelines

The European Banking Authority (‘EBA’) has released its final Guidelines on reporting requirements under Regulation 2023/1114 (EU) the Markets in Crypto-Assets Regulation (‘MiCAR’), aiming to equip European competent authorities with standardised information to monitor compliance among crypto-asset issuers and to provide the EBA with the necessary guidelines to perform annual significance assessments. These guidelines address critical data gaps, foster supervisory convergence, and ensure a consistent regulatory approach across EU Member States.

Enhancing Supervisory Consistency

The new guidelines focus on providing competent authorities—including the Malta Financial Services Authority (MFSA) in the Maltese context—with standardised data to enforce compliance with MiCAR. This ensures they have the necessary information to fulfil their supervisory responsibilities. The EBA emphasised that these measures are vital for establishing a level playing field across the Single Market.

To streamline data collection, the guidelines introduce standardised templates and instructions for issuers to gather information from Crypto-Asset Service Providers (‘CASPs’). These templates align with the data-sharing approach outlined in Regulation (EU) 2024/2902 the Commission Implementing Regulation laying down implementing technical standards for the application of MiCAR with regard to reporting related to asset-referenced tokens and to e-money tokens denominated in a currency that is not an official currency of a Member State.

Additionally, the EBA has published a visual guide to assist issuers of asset-referenced tokens (‘ARTs’) and e-money tokens (‘EMTs’), identify which templates apply to them, with the aim of simplifying compliance.

Legal Context and Obligations

The guidelines are issued under Article 16 of the EBA Founding Regulation (EU No 1093/2010), which authorises the EBA to develop guidelines for financial institutions and supervisory authorities. In this regard, competent authorities and financial institutions are required to make every effort to comply, ensuring uniformity across the EU.

ESMA’s Regulatory Contributions

The European Securities and Markets Authority (‘ESMA’) has also completed its regulatory preparations for MiCAR’s full application starting December 30, 2024. Over the past 18 months, ESMA has developed more than 30 technical standards and guidelines, many in collaboration with the EBA, to support the transition to a robust regulatory framework for the crypto market.

This is also tied to the warning issued by ESMA that while the value of certain crypto-assets has significantly and suddenly increased in the past weeks, this reflects an intensifying interest in relation to crypto-assets and confirms their highly volatile nature. ESMA has thus cautioned investors against being caught up in this hype and noted that they should reflect carefully before making any financial decision and consider their financial needs and objectives.

Key Deliverables from ESMA

The latest package from ESMA includes the following key takeaways:

1. Market Abuse Standards:

• • Rules to prevent and detect market abuse in crypto-assets.
  • Templates for reporting suspected market abuse.
  • Coordination procedures for addressing cross-border market abuse.

2. Guidelines on Reverse Solicitation:

• • Reinforcement of the narrow application of the reverse solicitation exemption, which applies only when the client exclusively initiates a service.

3. Suitability Guidelines:

• • Specifications as to how CASPs providing advisory or portfolio management services must ensure suitable recommendations or decisions for their clients, aligning with MiFID II standards.

4. Crypto-Asset Transfer Guidelines:

• • Detailed policies and procedures that CASPs should implement to protect clients and when transferring crypto-assets.

5. Qualification of Crypto-Assets:

• • Establishment of criteria for determining whether crypto-assets qualify as financial instruments, clarifying the overlap between MiCAR and MiFID II.

6. System Maintenance and Security:

• • Establishment of ICT risk management principles for offerors and entities seeking trading admission that fall outside the operational resilience requirements of MiCAR and DORA.

7. Implementation and Next Steps

• • The priority for ESMA is to collaborate with national authorities to ensure a smooth transition to MiCAR. The guidelines will be translated into all official EU languages and come into effect three months after publication. Additionally, final reports with draft Regulatory Technical Standards have been submitted to the European Commission for adoption.

Looking Ahead

The combined efforts of the EBA and ESMA mark a pivotal step in establishing a harmonised regulatory framework for crypto-assets in the EU. By addressing existing data gaps and aligning supervisory practices, these guidelines aim to enhance market stability and investor protection, fostering confidence in the rapidly-evolving crypto landscape.

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Author: Dr Catriona Cuschieri