Decoding MiCAR: A Comprehensive Guide to the EU’s New Crypto Asset Rules

European regulators are taking steps to clarify the classification of crypto-assets under the new Markets in Crypto-Assets Regulation (MiCAR). The European Supervisory Authorities have released draft guidelines proposing standardized templates and a test to ensure a consistent approach across the European Union.

The guidelines propose standardized templates for explanations and legal opinions regarding the classification of crypto assets, as well as a standardized test to ensure a common approach to classification.

The guidelines seek to help market participants and supervisors adopt a unified method for classifying crypto assets. The proposed standardized test, along with templates for explanations and legal opinions, will provide clear descriptions of regulatory classifications for different crypto assets.

For Asset-Referenced Tokens (ARTs), the white paper issued must include a legal opinion that explains the classification of the crypto-asset, confirming it is neither an electronic money token (EMT) nor a crypto-asset excluded from MiCAR. For other crypto-assets that are neither ARTs nor EMTs, the white paper must clearly state the classification, ensuring transparency on their regulatory status under MiCAR.

Comments on the consultation paper can be submitted via the consultation page by October 12, 2024. The ESAs will also host a virtual public hearing on September 23, 2024, from 10:00 to 12:00 CEST. Interested stakeholders can register for the event by September 19, 2024, at 16:00 CEST. Dial-in details will be provided to registered participants in due course. All contributions will be published after the consultation, unless anonymity is requested.

The draft guidelines have been developed according to Article 97(1) of MiCAR (Regulation (EU) 2023/1114). This requires the ESAs to jointly issue guidelines by December 30, 2024, in line with Article 16 of the ESA Founding Regulations. The guidelines will specify the content and form of explanations accompanying crypto-asset white papers and legal opinions on ARTs’ qualification.

The guidelines must include a template for both explanations and opinions, along with a standardized test for classifying crypto-assets. This joint-ESA policy mandate under MiCAR is crucial for creating a unified regulatory environment. MiCAR establishes regimes for regulating the issuance, public offering, and admission to trading of EMTs, ARTs, and other crypto-assets. It also sets a framework for crypto-asset service provision.

These new guidelines represent a significant step towards a harmonized regulatory approach to crypto-assets in Europe. The initiative is expected to foster a more transparent and standardized crypto-asset market.

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