Regulation
Only 9% of crypto companies are fully prepared for EU MiCA rules
According to a survey, only 9% of companies that fell under the scope of the European Union’s Cryptocurrency Markets Regulation (MiCA) are fully prepared for the upcoming rules. study by Acuiti commissioned by Eventus.
Based on a survey and series of interviews with senior executives at 68 companies involved in cryptocurrency trading in the areas of buying, selling and trading, the study also found that a quarter of the companies had not yet begun preparations.
With MiCA coming into force later this year, market participants are now moving to establish market surveillance systems to comply with the new regime. MiCA will be one of the first comprehensive regulatory frameworks for cryptocurrency trading to be developed in a major financial jurisdiction.
64% of companies plan to outsource to a third-party vendor
With regard to market surveillance, the MiCA Regulation builds on the requirements set out in the EU Market Abuse Regulation (MAR).
For many businesses, significant operational improvement will be required to put the systems in place to be compliant. According to the study, many companies weren’t even sure if they were in scope. As for those in question, a quarter had not yet started preparation. Just under a third were in an early stage of preparation, while just over a third were in an advanced stage.
The study found that companies investing in new systems typically look at outsourcing to a third-party software vendor, and 64 percent plan to do so.
Lack of awareness about who falls within the scope of MiCA
Ross Lancaster, head of research at Acuiti, said: “For firms not already operating under MiFID II, MiCA will represent a significant operational step forward in becoming compliant, and it is no surprise that we found firms were turning to third-party providers to assist them with their preparations. There is a relative lack of awareness in some areas of the market about who is in scope, which will need to be addressed if firms are to have time to prepare for compliance.”
Travis Schwab, CEO of Eventus, said: “While there are commonalities in trade surveillance across asset classes, digital assets can present some unique challenges. We have invested significantly over the past several years to ensure we can meet the needs of this industry, including the ability to handle real-time alert generation covering billions of messages per day, 24/7. Regulation in the EU is just the beginning of new regulatory guidance that we expect to see in jurisdictions around the world in the coming years.”