Blockchain Ecosystem’s Response to MiCA Regulation Proposal

On 24 September 2020, the European Commission introduced the Markets in Crypto-assets Regulation Proposal (hereinafter MiCA), and thus took an unprecedented step towards the legitimisation of the new asset class, crypto-assets. MiCA represents a comprehensive and ambitious regulatory initiative, which establishes the formal status of crypto-assets, creates disclosure and compliance regimes of many crypto-asset issuers and service-providers, and aims to prevent illicit activities connected to crypto-asset issuance, custody and trading. The blockchain community expressed its overwhelming support for a regulatory framework that infuses a sense of legal certainty and validation to an ecosystem that since its inception operated, to a large extent, in the regulatory grey areas. Nevertheless, after the initial analysis of its full legislative text, it became clear that some aspects of MiCA may not be sufficiently tailored to the nature of crypto-assets or the operation of the service providers in the crypto industry. INATBA, backed by its extensive membership base, was one of the first industry representatives that reflected on the positives and shortcomings of MiCA in its “Initial Response to the European Commission’s MiCA regulation”.