As all EU-based crypto companies are aware, the implementation of the Markets in Crypto-Assets Regulation (MICA) marks a significant milestone in the development of the cryptocurrency sphere. This new regulatory framework of the European Union introduces substantial requirements, notably:
Overall, MICA outlines general requirements, while the European Securities and Markets Authority (ESMA), in close collaboration with EBA, EIOPA, and the ECB, prepares detailed requirements. MICA took effect in 2023, but it's important to note that the regulation includes a significant number of measures to be developed by ESMA before the new regime becomes into force. During the MICA implementation phase, ESMA conducts public consultations on a series of technical standards, which are currently being published in three sets.
To date, two sets have been published for public discussion, but none have been formally adopted. By the end of 2024, all three sets are expected to be adopted, with some even by mid-2024 (MICA becomes effective from December 30, 2024, with sections III and IV effective from June 30, 2024). Despite MICA's partial implementation in June 2023, crypto companies that received local registrations, authorizations, or licenses in their country of registration prior to MICA starting effect ("local registration") have the right to continue their activities until the end of December 2024 and even beyond.
According to Article 143(3) of MICA, crypto companies with local registration are allowed to provide their services until December 30, 2024, and may also continue to do so until July 1, 2026 ("transition period"), or until they receive or are denied authorization to conduct crypto activities, as per MICA, depending on which comes first. By June 30, 2024, each EU Member State must notify the European Commission and ESMA whether they will use the option of the transition period or shorten it for their country. For example, Spain wants to shorten the transition period till January 1, 2026. Lithuania is also considering reducing this period.
Additionally, deviating from Article 63 of MICA, EU Member States may apply a simplified procedure for crypto authorization applications submitted from December 30, 2024, to July 1, 2026, for crypto companies that had local registrations as of December 30, 2024.
Considering the above, crypto companies that obtained local registration before December 30, 2024 (and preferably before June 30, 2024, as it's uncertain whether local registrations will be allowed from July 1, 2024, till December 30, 2024), will enjoy all the benefits of local registration during the transition period without complying with MICA requirements, only to obtain MICA authorization at the end of the transition period, possibly even under a simplified procedure. Thus, the period until December 30, 2024 (and preferably until June 30, 2024) is essentially a "last train" period to take advantage of all the benefits of the transition period and the simplified authorization procedure under MICA at the end of such period.
