On 30 June 2022, the Council of the European Union (EU) announced1 that the Council presidency and the European Parliament reached a provisional agreement on the proposed markets in crypto-assets regulation (MiCA). More details here. The aim behind the proposed regulatory framework is to bring legal and regulatory certainty for crypto-asset operators across the EU.
MiCA forms part of the Digital Finance Package proposed by the European Commission (EC) to fulfil its Digital Finance Strategy, which aims at developing a holistic approach across the EU to foster innovation, whilst ensuring financial stability and consumer protection. The Digital Finance Strategy sets out to ensure “same activity, same risks, same rules”, and hence traditional financial services market players and FinTechs and BigTechs providing payment services, savings and investment products, and insurance, amongst others, should all be subjected to the same regulations and supervision.
Through the package, the EC aims to bridge the gap prevailing in existing EU legislation by ensuring on one side that the current frameworks do not hinder the development of digital finance and on the other side that emergent technologies and new products falling within the scope of financial regulation are regulated and supervised appropriately.
The provisional agreement is subject to the approval of the Council of the EU and the European Parliament, prior to the formal adoption procedure. It is anticipated that the updated text will be released in the coming months, with implementation expected by 2024.
These changes become applicable as from 1 August 2022. UCITS ManCos & AIFMs, and relevant self-managed schemes, are guided to ensure compliance with these new obligations.
Malta was one of the first jurisdictions to introduce a framework to regulate crypto-asset activity back in 2018. The Virtual Financial Assets (VFA) Act and its underlying framework sought to bring about legal and regulatory certainty for operators wishing to issue or provide services in relation to assets that are intrinsically dependent on, or utilise, Distributed Ledger Technology, in or from Malta. Having a regulatory framework governing crypto-asset activity puts the Maltese jurisdiction in an expedient position to adopt MiCA and transition pragmatically from a home-grown regime to a European one.
Mamo TCV’s FinTech team provides regulatory advice in relation to pre- and post-authorisation requirements of business models using innovative technology arrangements in the financial services space. You can learn more about our scope of services in this area through this link.
This document does not purport to give legal, regulatory, financial or tax advice. Should you require further information or regulatory assistance, please do not hesitate to contact Martha Chetcuti.