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tl;dr: MiCA Regulation Title VI requirements, which address the prevention and prohibition of market abuse, will be fully applicable by December 30, 2024.
MiCA (Markets in Crypto-Assets) regulation represents a pivotal shift in regulatory standards and has significant implications for crypto-asset service providers operating within the European Union. Understanding its licensing requirements is paramount for anyone in the crypto industry. This blog post is a summary of our recently recorded webinar, where we covered your responsibilities under MiCAr's Title VI on the prevention and prohibition of market abuse involving crypto-assets, the steps required to comply with these new regulations and the timeline for implementation.
Insights
Andrea Pantaleo, the Head of Crypto, Web3, and Fintech at DLA Piper, explains the distinction between Titles V and VI of MiCA regulation. He emphasizes that “Title VI, relating to market abuse, applies not only to CASPs but to any person that professionally arranges or executes transactions on crypto assets.” This indicates why the grandfathering period does not apply to Title VI. He further elaborates on Italy’s stance, mentioning that in the current draft of the law, “Title VI will apply starting from December 30, 2024,” underscoring the urgency for compliance.
Ernest Lima, Partner at XReg Consulting, highlights the broad and extraterritorial nature of MiCAr’s market abuse provisions. He states, “Market abuse applies anywhere in the world and to any act or omission in the EU or in third countries.” Ernest also discusses the draft regulatory technical standards, noting their role in clarifying “the reporting of any reasonable suspicion” and the importance of appropriate arrangements, systems, and procedures to prevent and detect market abuse.
Konstantinos Baktidy, Product Manager at Solidus Labs, delves into the complexities of detecting market abuse in the crypto space. He identifies unique challenges, such as touting and bashing on social media platforms, and emphasizes the importance of advanced machine learning models to analyze sentiment data. Kosta also mentions the challenges posed by insider trading in the DeFi world, noting that “detecting it requires digging through DeFi data and tracing it back to exchanges.”
Delphine Forma, Policy Lead at Solidus Labs, emphasizes the need for early preparation and coordination across various teams within an organization. She states, “You need to have a plan, get ready early, and see which team is going to be impacted because it goes all across the board.” She also highlights the importance of community and support, inviting participants to join the Crypto Compliance and Legal Telegram group for continuous support and discussions.
Conclusion
The MiCA regulation is set to redefine the landscape for crypto-asset service providers in the EU. With stringent requirements on market abuse set to take effect by December 30, 2024, it is crucial for CASPs and for any person who professionally arranges or executes transactions on crypto assets to begin their compliance journey now. Early preparation, robust internal policies, and advanced surveillance systems will be key to navigating these regulatory challenges successfully.
Interested in chatting about MiCA regulation and how Solidus Labs can help? Reach out now to Solidus Labs and let us guide you through the complexities of MiCA regulation. Ensure your crypto business is compliant and ready for the future.
