⦿ Executive Snapshot

• What: The article clarifies misconceptions about the MiCA (Markets in Crypto-Assets) regulation and its limitations regarding the services a Crypto-Asset Service Provider (CASP) can offer.
• Who: Co-authored by Aaron Glauberman, Viktor Juskin, and Sabir Alijev from LegalBison, who advise companies on MiCA licensing and regulatory structuring.
• Why it matters: Understanding the boundaries of MiCA is crucial for crypto platforms to avoid legal issues and ensure compliance, especially for those offering payment services, derivatives, or futures.

⦿ Key Developments

• MiCA grants a CASP license for specific crypto-asset services but does not cover payment services, derivatives, or futures trading.
• Article 2(4) of MiCA explicitly excludes financial instruments under MiFID II and payment services under PSD2 from its scope.
• The regulation allows CASPs to provide payment services only if they hold a separate EMI/PI license, which is not covered by the CASP authorization.

⦿ Strategic Context

• Historical variations in national VASP regimes led to differing interpretations of what services could be provided without additional licenses, complicating compliance.
• The increasing regulatory scrutiny in jurisdictions like Estonia has highlighted the risks for platforms operating under assumptions about their MiCA licensing.

⦿ Strategic Implications

• Platforms may face immediate operational risks if they incorrectly assume that MiCA licensing covers all aspects of their business, particularly in offering derivatives or payment services.
• Long-term, a clearer understanding of regulatory frameworks will be essential for platforms to structure their services appropriately and avoid legal repercussions.

⦿ Risks & Constraints

• Regulatory risks arise from misinterpretations of MiCA, potentially leading to unauthorized operations and legal challenges for crypto platforms.
• The evolving regulatory landscape requires continuous monitoring and adaptation by platforms to ensure compliance with both MiCA and other relevant directives like MiFID II and PSD2.

⦿ Watchlist / Forward Signals

• Monitoring the implementation of MiCA and its impact on existing platforms, particularly those involved in derivatives or payment services, will be crucial.
• Future regulatory updates or clarifications from EU authorities regarding the interpretation of MiCA will signal necessary adjustments for compliance by crypto platforms.