The European Union’s comprehensive crypto legislation, the Markets in Crypto Assets (MiCA) bill, which was unanimously approved last year, is currently undergoing further deliberation. MiCA, part of a broader set of financial laws called DORA, has prompted some crypto companies to consider relocating their operations.
Despite being published in June 2023, MiCA has already undergone two consultation sessions, with another scheduled for April. The legislation’s first part is set to take effect in June 2024, while other provisions are expected to become operational in December 2024.
Proposed Exceptions for European Customers
The European Securities and Markets Authority (ESMA) has considered feedback regarding companies operating outside the EU and is proposing exceptions for them. Previously, ESMA intended to restrict non-EU companies from offering crypto assets and services to EU citizens. However, the new provision would allow such offerings if an EU citizen explicitly requests them from a provider, a concept known as “reverse solicitation.”
This approach aims to give experienced crypto investors more freedom while safeguarding less tech-savvy investors. It enables legal investments while ensuring consumer protection.
Feedback and Discussion
ESMA invites investors to review the document and submit feedback by April 29th, when regulators will discuss the proposed adjustments. Additionally, ESMA seeks feedback on the potential classification of crypto assets as financial instruments. If a crypto asset qualifies as a monetary contract, it may fall under the regulatory framework of another bill called MiFID II instead of MiCA.