MiCAR: EBA releases important statement for issuers and offerors of ARTs and EMTs and stakeholders

On 5 July 2024, the European Banking Authority (EBA) published a statement on the application of the Markets in Crypto-Assets Regulation (MiCAR) to issuing, offering and admission to trading of asset-referenced tokens (ARTs) and e-money tokens (EMTs).

The EBA’s statement addresses various stakeholders, including issuers and offerors of ARTs and EMTs, consumers, crypto-asset service providers and national competent authorities (i.e. EU national regulators). The statement is of particular importance as it sets out expectations and guidance to ensure that all stakeholders operate within the regulatory framework established for ARTs and EMTs under Titles III and IV of MiCAR, which has applied since 30 June 2024.

In this article, we outline the main points of the EBA statement and highlight the implications for the crypto-asset market in the EU.

EBA statement

Issuers and offerors of ARTs and EMTs

The EBA reminds persons who are issuing (or intending to issue) to the public, offering to the public or seeking admission to trading of ARTs and EMTs that the new requirements under MiCAR have applied since 30 June 2024. The EBA states that it expects any person who intends to commence ART/EMT activities to comply fully with MiCAR from that date. Issuers who have issued ARTs in accordance with applicable law prior to 30 June 2024 may continue to do so in accordance with the transitional arrangements set out in Articles 143(4) and (5) of MiCAR, but no similar transitional arrangement applies for EMTs.

The EBA also draws attention to the technical standards and guidelines available on its website and urges issuers and offerors to have regard to these documents, even if they are pending adoption by the European Commission or publication in the Official Journal.

Consumers

The EBA informs consumers that they should check whether the issue, offer or admission to trading of an ART or EMT is carried out in accordance with MiCAR, and that such information is available in the white paper for crypto-assets and on the website of the issuer/offeror/trading platform. The information will also be available in the register of the European Securities and Markets Authority. 

The EBA warns consumers that, if the issue or offer to the public, or admission to trading, of an ART or EMT within the EU is not carried out in accordance with MiCAR, the safeguards set out in MiCAR do not apply. In these circumstances, consumers should be extremely cautious in acquiring such crypto-assets. The EBA provides examples of where the issue, offer or admission to trading within the EU of an ART or EMT is not in accordance with MiCAR, such as:

• where an EMT is issued by an entity in the EU that does not hold an authorisation as a credit institution or electronic money institution
• where an ART is issued by an entity in the EU that is not a credit institution and has not obtained authorisation under MiCAR
• or where an entity who is not the issuer of the ART or EMT has not first obtained the written consent of the issuer

The EBA also warns consumers that, before acquiring any type of crypto-asset, they should have regard to the list of items to "know and check" that are set out in the European Supervisory Authorities’ joint warning on the risks of crypto-assets.

Other stakeholders

The EBA advises all stakeholders providing crypto-asset services that all persons carrying out ART/EMT activities should comply with MiCAR. This means that stakeholders should set up, as soon as possible, procedures to assess compliance with MiCAR in relation to ARTs and EMTs for which they offer related services and should refrain from carrying out services that constitute issuing or offering to the public, seeking admission to trading or placing non-compliant ARTs or EMTs.

Competent authorities

The EBA expects competent authorities who become aware that a person has commenced or plans to commence ART or EMT activities to bring, on a best-efforts basis, to that person's attention the relevant requirements under MiCAR, the EBA's guidelines and technical standards and other applicable regulatory measures, including in the areas of anti-money laundering and counter-terrorist financing and operational resilience. 

Competent authorities are also encouraged to make certain information in relation to MiCAR available, in an accessible manner, on their websites. This information includes:

• a notice that ARTs and EMTs are regulated products which can only be provided in accordance with MiCAR
•  information on the rights and protections of holders of ARTs and EMTs under MiCAR
• relevant sources of information, such as registers

Finally, the EBA observes that crypto-assets are inherently “borderless” and close cooperation between competent authorities, the EBA and the other European Supervisory Authorities is expected to ensure that MiCAR is enforced in a consistent, timely and effective manner to ART/EMT activities.

Next steps

The EBA statement is an important communication that clarifies the obligations of various stakeholders in relation to the application of MiCAR to ARTs and EMTs. The statement signals the EBA's expectations and its intention to promote the timely and consistent implementation of MiCAR across the EU, and to foster supervisory convergence, a level playing field and prompt enforcement of MiCAR.

Issuers and offerors of ARTs and EMTs, as well crypto-asset service providers and consumers, should familiarise themselves with the requirements and safeguards in MiCAR and the technical standards and guidelines issued by the EBA, and ensure compliance with the applicable rules on an on-going basis. 

For further information in relation to this topic, please contact Patrick Brandt, Partner, Ciara Brady, Senior Associate, Louise Hogan, Senior Associate, Sarah Lee, Senior Knowledge Lawyer or any member of ALG's Financial Regulation Advisory team.  

Date published: 8 August 2024