MICA: some information on the new European regulations on cryptocurrencies

At its session on April 20, 2023, the European Parliament voted to approve the text of the new Regulation on Crypto Assets Markets (MiCA Regulation). This is the first organic European attempt to regulate such an innovative sector as cryptocurrencies, tokens, and assimilates.

The MiCA Regulation goes to introduce common rules for supervision, consumer protection and environmental safeguards of crypto-assets, including cryptocurrencies.

The MiCA Regulation, formally agreed in June 2022 with the Council, also goes to regulate a regime to counter market manipulation and money laundering, the financing of terrorism and other criminal activities.

The approved text applies to all crypto activities not regulated by financial services legislation.

New rules on transparency, disclosure, authorization regime and transaction supervision are provided for issuers and intermediaries of crypto assets (including asset-linked tokens and e-money tokens).

In this regard, to protect consumers, the MiCA Regulations provide for a regime of increased disclosure of the risks, costs and burdens associated with crypto asset transactions.

In order to support market integrity and financial stability, new regulations have also been introduced with reference to public offerings of crypto assets.

With a view to combating money laundering phenomena, the establishment of a public registry by ESMA with the references of non-compliant crypto asset service providers operating without authorization within the European Union is planned.

Finally, to reduce the high carbon footprint of cryptocurrencies, significant service providers will be required to publish their energy consumption.

The text of the MiCA Regulation approved by the EU Parliament now passes to the Council for final approval, which will be followed by publication in the Official Journal of the European Union.

The risk associated with implementing this legislation is that the most interesting projects, or the most user-protecting services, will find an environment stifled by too many rules and thus develop elsewhere. Overlegislation is always a danger.