![]() ![]() Issuers of other crypto assets must notify their white paper and, where applicable, marketing materials, to their respective competent authority at least 20 working days before publication of their crypto-asset white paper - and no later than the beginning of the crypto-asset-offer to the public. White Paper and Marketing Communications Notification Furthermore, an issuer of other crypto-assets must draft a MiCA-compliant white paper that must be notified to the issuer’s relevant competent authority. Such an issuer is also required to act professionally, maintain system and security standards and act in best interests of token-holders. This is to ensure proper monitoring and supervision by competent authorities. Under MiCA, to offer ‘other’ crypto-assets to the public within the EEA, a potential issuer of such tokens must be a legal entity. The Impact Assessment proffers Filecoin as an example of a utility token. It is stated that not dissimilar to payment and investment tokens, utility tokens can be traded on secondary markets. Some of them enable access to a specific current or prospective service or good (similar to a voucher), while some are issued to reward operators for maintaining the DLT, for validating and recording transactions. The impact assessment published alongside the MiCA proposal describes how utility tokens have two main functions. It is stated that utility tokens should be considered as a specific type of crypto-assets and are intended to provide digital access to a good or service and are only accepted by the issuer of that token. MiCA considers utility tokens as those tokens which have non-financial purposes related to the operation of a digital platform and digital services. It appears that this also includes algorithmic stablecoins and utility tokens. It appears that if a crypto-asset does not fall into the ART or EMT category, it will be subject to the rules in relation to ‘other crypto-assets’. ‘Other crypto-assets’ include crypto-assets such as utility tokens, which MiCA defines specifically. The category of crypto-assets this post will describes as ‘other crypto-assets’ effectively is a catch all-term for crypto-assets that do not fall under the other two distinct categories of crypto-asset. MiCA’s provisions aimed at the first two categories of crypto-assets have been examined in separate posts. This article specifically examines how MiCA proposes to regulate issuers of MiCA’s third category of crypto-asset: (3) other crypto-assets (or, crypto-assets other than asset-reference tokens or E-Money tokens). The scope of Mica is however limited to crypto-assets that do not qualify as financial instruments, deposits or structured deposits under EU financial services legislation. MiCA specifies three categories of crypto-assets: (1) asset-referenced tokens, (2) e-money tokens and (3) other crypto-assets. In respect of crypto-asset issuers, the first step in interpreting how MiCA in its current form will affect activities in respect of crypto-asset issuance, is to identify the category into which an issuer’s respective crypto-asset falls. In such a scenario there is value in considering the proposed MiCA regulation, as published by the Commission, from the perspective of a crypto-asset issuer or service provider whose activities will be significantly affected by MiCA’s proposed regulatory regime. However the legislative developments so far have suggested MiCA’s final form will not deviate extensively from the commission’s proposed draft as outlined below. In this light, it remains to be seen what the final form of the regulation will look like. In respect of the regulation’s legislative progress, the EU parliament has voted to adopt a report on MiCA which will serve as their negotiating mandate in the ensuing trilogue negotiations between representatives of the Parliament, the Council and the Commission. The MiCA regulation was proposed by the European Commission (September 2020) in their role as the initiators of EU legislation. This proposed regulation divides crypto assets into different categories and outlines regulatory requirements for crypto-asset issuers and service providers. The EU Markets in Crypto-assets Regulation, (“MiCA”) is on course to be the first large-scale and mainstream regulatory regime that aims to govern and regulate crypto-asset issuers and service providers in the world. ![]()
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