MiCA: Markets in Crypto-Assets Regulation

The Markets in Crypto-Assets Regulation (MiCA), formally Regulation (EU) 2023/1114, is the European Union's framework for crypto-assets that existing EU financial services law does not cover. MiCA sets harmonised rules across all 27 Member States for the issuance, offer to the public and admission to trading of crypto-assets, and for the authorisation and supervision of crypto-asset service providers (CASPs). The regulation sets three categories of crypto-asset: asset-referenced tokens (ARTs), backed by several assets or currencies; e-money tokens (EMTs), backed by a single official currency; and all other crypto-assets. Each category has its own issuance requirements, including a white paper with standardised disclosures. CASPs must be authorised by their national competent authority and can then passport their services across the EU. MiCA also protects market integrity by prohibiting insider dealing, unlawful disclosure of inside information and market manipulation in crypto-asset markets. Consumer protection is a central focus, with requirements for fair marketing, risk disclosure and complaint handling. Significant ARTs and EMTs face additional requirements, including higher own funds and stricter governance. MiCA gives the crypto industry in Europe legal certainty while adding investor protection and financial stability safeguards.

1. Crypto-asset service providers (CASPs): exchanges, custodians, trading platforms, portfolio managers and advisers
2. Issuers of asset-referenced tokens (ARTs) and e-money tokens (EMTs, or stablecoins)
3. Issuers of other crypto-assets that offer them to the public or seek admission to trading
4. Financial entities already authorised under EU financial services law that want to provide crypto-asset services

1. 01

   CASP authorisation

   Crypto-asset service providers must be authorised by their national competent authority, showing adequate governance, prudential requirements, operational resilience and compliance arrangements. Authorised CASPs can passport their services across the EU.

2. 02

   White paper requirements

   Issuers must publish a crypto-asset white paper with standardised disclosures about the project, the crypto-asset, the issuer, the underlying technology, rights, risks and environmental impact. White papers must be notified to the competent authority before publication.

3. 03

   Stablecoin governance

   Issuers of asset-referenced tokens and e-money tokens must hold adequate reserve assets, honour redemption rights, meet own funds requirements and keep up governance and operational resilience standards. Significant ARTs and EMTs face stricter requirements and direct EBA supervision.

4. 04

   Market integrity

   MiCA prohibits insider dealing, unlawful disclosure of inside information and market manipulation in crypto-asset markets. Trading platforms must have market surveillance arrangements to detect and prevent market abuse.

5. 05

   Consumer protection

   CASPs must act honestly, fairly and professionally in the best interests of clients. Requirements include fair and clear marketing communications, risk disclosures, complaint handling, conflict of interest management and best execution.

6. 06

   AML/CFT compliance

   CASPs are obliged entities under EU anti-money laundering rules, which requires customer due diligence (KYC), transaction monitoring, suspicious activity reporting and travel rule compliance for crypto-asset transfers.

MiCA requires Member States to give national competent authorities the power to impose administrative penalties and other measures (art. 111). For natural persons, maximum fines must be at least EUR 700,000. For legal persons, maximum fines must be at least EUR 5 million, or 3%, 5% or 12.5% of total annual turnover depending on the infringement. For market abuse, Member States must provide maximum fines of at least EUR 15 million or 15% of turnover for legal persons, and at least EUR 5 million for natural persons. Authorities can also withdraw authorisations, issue public statements, order the conduct to stop and impose temporary bans on members of management. The EBA directly supervises issuers of significant asset-referenced tokens and can fine them up to 12.5% of annual turnover, or twice the profits gained or losses avoided where those can be determined.

1. Sept 2020

   European Commission publishes the Digital Finance Package, including the MiCA proposal

2. Jun 2023

   MiCA published in the Official Journal of the EU (9 June) and in force from 29 June

3. Jun 2024

   Title III (ARTs) and Title IV (EMTs) apply: stablecoin rules in effect

4. Dec 2024

   MiCA applies in full: CASP authorisation and all remaining provisions take effect

5. Jul 2026

   Transitional period for existing CASPs ends on 1 July 2026 at the latest (art. 143(3)): since then, only CASPs authorised under MiCA (art. 63) or eligible financial entities that notified the MiCA competent authority of their home Member State (art. 60) may provide crypto-asset services