The Legal Status of Crypto-Asset Issuers in the Light of the Proposed MICA Regulation

Abstract

The progress of modern digital technologies raises the question on the necessity of common regulatory mechanism applicable to crypto-asset issuers and embracing comprehensive regulation of the status of all parties involved in crypto-asset trade. However, regulation of major parties provided by the V. AML Directive has been inconsistent and abstract.1 Under pressure of policy-makers and professional community, the European Commission has come up with the long awaited draft MICA regulation2 designed to ensure universal regulation of crypto-assets across all member states of the European Union (hereafter EU) including those of the European Economic Area (hereafter EEA). The proposed draft purports to harmonize fragmented regulation of crypto-assets which EU member states were forced to introduce for lack ofEU-wise regulation of this institution. The main purpose of this paper is to analyze the newly established institutions including categorization of crypto-assets covered by MICA. The main functional aspects of the crypto-asset offering process including a requirement to publish a white paper are examined in this context. The supervisory role of the European Banking Authority (EBA) in respect of the issuers of significant crypto-assets is specifically discussed. Based on this analysis, the author concludes that the application of MICA is handicapped by a number of problems discussed in more detail further on. Thus, MICA is not straightforward in its definitions of cryptoassets which are rather general, and contains no detailed explanation of cooperation between the competent authorities in the EU and third countries to prevent money laundering and terrorist financing. The following research methods were used by the author in writing the paper: formal legal method, comparison, synthesis, analysis, analogy, induction and deduction methods.