Regulation
ESMA warns non-EU crypto venues: NCAs to monitor MiCA compliance
The European Securities and Markets Authority (ESMA) has published an opinion on the authorisation of global cryptocurrency firms under the Markets in Cryptocurrencies Regulation (MiCA).
This Opinion addresses the risks associated with cryptocurrency firms seeking EU authorisation for activities such as cryptocurrency brokerage, while maintaining significant parts of their operations, such as intra-group execution venues, outside the EU regulatory framework.
ESMA highlights concerns about complex structures of global cryptocurrency firms. Such structures could involve an EU-licensed broker routing orders to a place of execution located outside the EU. Such arrangements could undermine consumer protection and create a level playing field with EU-authorised execution venues.
In response to these risks, Data Protection Authority advises National Competent Authorities (NCAs) to exercise caution during the authorisation process. It recommends that NCAs carefully assess the corporate structures of global companies to prevent them from circumventing the MiCA obligations This approach aims to protect consumers and ensure the transparent and orderly functioning of cryptocurrency markets.
The Opinion highlights the need for a case-by-case assessment. It specifies requirements relating to best execution, conflicts of interest and the obligation to act in the best interests of clients. It also covers responsibilities relating to the custody and administration of crypto-assets on behalf of clients.
Cryptocurrency execution venues are crucial to the cryptocurrency ecosystem and Not establishes detailed rules for the operation of trading platforms for these activities.
Technical standards for CASPs
In the meantime, ESMA has published its second final report under the Cryptocurrency Markets Regulation, as reported by The financial magnatesThis report outlines eight draft technical standards aimed at increasing transparency for retail investors and clarity for providers.
The standards cover sustainability indicators, business continuity for crypto-asset service providers (CASPs), trade transparency, orderbook formats, recordkeeping, and white paper readability. They include data protocols to facilitate NCAs oversight. The draft standards establish technical requirements for both human and machine readability of crypto-asset white papers and provide templates for CASP registries.
The European Securities and Markets Authority (ESMA) has published an opinion on the authorisation of global cryptocurrency firms under the Markets in Cryptocurrencies Regulation (MiCA).
This Opinion addresses the risks associated with cryptocurrency firms seeking EU authorisation for activities such as cryptocurrency brokerage, while maintaining significant parts of their operations, such as intra-group execution venues, outside the EU regulatory framework.
ESMA highlights concerns about complex structures of global cryptocurrency firms. Such structures could involve an EU-licensed broker routing orders to a place of execution located outside the EU. Such arrangements could undermine consumer protection and create a level playing field with EU-authorised execution venues.
In response to these risks, Data Protection Authority advises National Competent Authorities (NCAs) to exercise caution during the authorisation process. It recommends that NCAs carefully assess the corporate structures of global companies to prevent them from circumventing the MiCA obligations This approach aims to protect consumers and ensure the transparent and orderly functioning of cryptocurrency markets.
The Opinion highlights the need for a case-by-case assessment. It specifies requirements relating to best execution, conflicts of interest and the obligation to act in the best interests of clients. It also covers responsibilities relating to the custody and administration of crypto-assets on behalf of clients.
Cryptocurrency execution venues are crucial to the cryptocurrency ecosystem and Not establishes detailed rules for the operation of trading platforms for these activities.
Technical standards for CASPs
In the meantime, ESMA has published its second final report under the Cryptocurrency Markets Regulation, as reported by The financial magnatesThis report outlines eight draft technical standards aimed at increasing transparency for retail investors and clarity for providers.
The standards cover sustainability indicators, business continuity for crypto-asset service providers (CASPs), trade transparency, orderbook formats, recordkeeping, and white paper readability. They include data protocols to facilitate NCAs oversight. The draft standards establish technical requirements for both human and machine readability of crypto-asset white papers and provide templates for CASP registries.