EU Launches Consultation Procedure for MiCA Framework

The European Union’s financial regulator will initiate a three-part consultation procedure for the recently adopted MiCA framework for crypto-asset markets.

In a notice published on the website of the European Securities and Markets Authority (ESMA) on June 12, regulators stated that beginning in July 2023, consultation packages would cover the authorization, governance, conflicts-of-interest, and complaint-handling procedures of MiCA.

The measures are subject to European Commission, European Parliament, and European Council approval.

The first package of consultations will include technical standards for applying to crypto asset service providers in the EU, as well as procedures for processing complaints and disclosing potential conflicts of interest.

The second, anticipated to begin in October, will examine disclosures of information to investors, governance requirements for crypto firms, and “sustainability indicators and adverse impacts on the climate.”

According to ESMA, the final consultation, scheduled for the first quarter of 2024, could address investor protection and anti-market exploitation regulations.

The MiCA framework proposed an approximate 18-month timeline for full implementation, with all rules taking effect in December 2024.

After the European Commission proposed MiCA in September 2020, the Economic and Financial Affairs Council of the European Union voted in favor of it in May 2023.

The European Securities and Markets Authority (ESMA) stated that the framework “entered into force” in June. Still, regulators and legislators appear to be considering proposals to ensure seamless implementation of the crypto-focused legislation.

Regulatory clarity for digital assets is frequently at the forefront of discussions at a time when crypto industry executives are deciding in which jurisdictions to conduct business.

MiCA seeks to establish a uniform regulatory framework for crypto across EU member states, whereas US officials have been criticized for their “regulation by enforcement” approach.