The post EU Warns Crypto Firms Ahead of MiCA Implementation appeared first on Coinpedia Fintech News

In light of the impending Markets in Crypto Assets Regulation (MiCA), the European Union (EU) has expressed concerns over potential regulatory loopholes. The EU is wary of global crypto firms exploiting differences between member states, possibly operating overseas through EU-based fronts.

ESMA’s Call to Action

The European Securities and Markets Authority (ESMA), the EU’s chief financial markets regulator, issued a notice on its official news page this Tuesday. Titled “ESMA encourages preparations for a smooth transition to MiCA,” the notice includes a letter and a statement.

ESMA’s statement urges major global crypto firms to kickstart their MiCA preparations immediately. This comes as national regulators still establish procedures for exchanges and wallet providers to secure the much-desired crypto license.

In essence, the statement highlights:

Many entities providing crypto services in the EU might continue under current laws until MiCA’s transitional phase concludes in July 2026.

With their often intricate and non-transparent group structures, global crypto firms are expected to operate across multiple Member States.

ESMA’s convergence efforts aim to ensure uniform supervisory expectations for entities offering crypto services throughout the EU during MiCA’s transitional phase.

Guidance for National Authorities

The statement also provides directives for National Competent Authorities (NCAs), emphasizing collaboration with ESMA for MiCA’s seamless rollout. Key directives include:

Resource Allocation: NCAs should allocate sufficient resources to ensure robust supervision from MiCA’s inception.

Early Dialogue: Establish early communication channels with potential applicants.

Unified Practices: Standardize supervisory practices across the EU to deter regulatory arbitrage.

Information Sharing: Share data about authorization, especially concerning global crypto firms with intricate group structures.

Prevent “Letter-Box” Entities: Stop EU-based crypto service providers from excessively relying on non-EU entities for EU client services.

Ensure Compliance: Guarantee that the simplified authorization procedure aligns with all MiCA requirements and doesn’t offer undue competitive advantages.

Enforcement: As per national laws, take action against entities unlawfully offering crypto services during MiCA’s transitional phase.

In conclusion, ESMA and NCAs are resolute: the EU will not tolerate regulatory evasion or illicit activities in the crypto sector.

---

Filed under: Bitcoin - @ October 17, 2023 1:22 pm