80% of crypto companies are unaware of this crucial deadline!

3h00 ▪ 4 minute read ▪ by Luc Jose A.

The MiCA regulation imposes new environmental sustainability disclosure obligations for crypto companies in Europe. However, many entities appear to be misinterpreting the established deadlines, which could lead to significant regulatory consequences.

Crypto firms’ confusion over disclosure deadlines

Many crypto companies within the European Union appear to be unaware of the deadlines imposed for disclosure of sustainability information, despite clarifications provided by regulators. According to Tim Zölitz, director of risk at Crypto Risk Metrics, the vast majority of cryptocurrency service providers are unaware that disclosure of ESG (environmental, social and governance) data will need to begin on January 1, 2025. This confusion could result from a misinterpretation of the legislation, where some mistakenly believe that transparency obligations will only come into force with the publication of white papers on crypto assets, scheduled for 2027.

Despite clarifications from the European Securities and Markets Authority (ESMA), many of these entities are still unaware of the exact requirements. Crypto Risk Metrics recently signed a memorandum of understanding with the Digital Token Identifier (DTI) Foundation to collaborate on ESG data visualization. This initiative aims to improve transparency and help cryptocurrency service providers comply with new regulations. However, the environmental impact of crypto activities, particularly mining, remains a significant concern, potentially hindering wider adoption of these assets. The industry must adapt quickly to avoid potential sanctions and promote sustainable growth.

Clarifications and consequences

The MiCA rules, established to regulate the cryptocurrency market in Europe, impose strict environmental transparency requirements. According to the guidelines, issuers of asset-referenced tokens (ART) and electronic money tokens (EMT) must start disclosing their environmental impacts by June 30, 2024. Additionally, all cryptocurrency service providers must comply with the ESG disclosure requirements by the end of the year. However, this obligation has often been misunderstood, as some industry participants mistakenly believed that such information was only required with the publication of the white papers, expected in 2027.

This misinterpretation partly stems from the initial wording of the MiCA law, which was subsequently clarified by the European Securities and Markets Authority (ESMA). In a consultation document, ESMA specified that information on environmental impacts must be published on institutions’ websites, independently of white papers. This clarification aims to eliminate any ambiguity, but gray areas still exist.

Exchange platform operators must also ensure that this information is accessible in a clear and visible manner. Non-compliance could not only lead to regulatory fines, but also tarnish the reputation of crypto companies, thus hindering the adoption of these assets by major crypto companies. institutional investors who are environmentally conscious.

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Luc José A.

Graduated in Science Po Tolosa and holder of a blockchain certification consultant issued by Alyra, I returned to participate in Cointribune in 2019. Capturing the potential of blockchain to transform numerous sectors of the economy, I have made a commitment to raise awareness and inform the great public about this constantly evolving ecosystem. My goal is to allow anyone to better understand blockchain and learn about the opportunities it offers. I strive every day to provide an objective analysis of current events, to decipher market trends, to convey the latest technological innovations and to put into perspective the economic and social efforts of this revolution in brands.

DISCLAIMER

The views, thoughts and opinions expressed in this article are solely those of the author and should not be construed as investment advice. Do your own research before making any investment decisions.

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