ADAN Submits Comments on ESMA’s Consultations Regarding the Technical Standards of the Market in Crypto-Assets (MiCA) Regulation
ADAN has submitted comments on ESMA's consultation on the technical standards for the Market in Crypto-Assets (MiCA) Regulation.
In January 2024, the European Securities and Markets Authority (#ESMA) launched two public consultations as part of the third package of consultations on technical standards (RTS) under the European #MiCA regulation. ESMA’s first consultation, titled “Classification of Crypto-Assets as Financial Instruments,” aimed to clearly define which types of crypto-assets should be treated as financial instruments within the EU—a fundamental issue for market participants and market supervision. The second consultation focused on “reverse solicitation”—an exception allowing non-EU entities to offer crypto-asset services or products to EU clients without having to comply with all European regulatory requirements (notably MiCA), provided that the initial request is made exclusively at the client’s initiative.
- ADAN's contributions to the consultation on reverse solicitation:
As part of the consultation on reverse solicitation, ADAN acknowledged ESMA’s efforts to protect investors and prevent circumvention of MiCA regulations. However, the Association cautions ESMA about the risks to equal opportunity and investor protection if the concept of “reverse solicitation” remains too broad and vague. Adan advocates that exemptions from reverse solicitation remain strictly defined to ensure clarity and consistency in the rules governing interactions between entities outside the EU and European clients. Furthermore, ADAN has proposed improvements to current enforcement measures, such as the application of “name and shame” principles and the use of geoblocking for non-compliant actors.
- ADAN's Submission to the Consultation on the Classification of Crypto-Assets as Financial Instruments:
With regard to the classification of crypto-assets as financial instruments, ADAN supports the “case-by-case” approach proposed by ESMA. This position acknowledges the diverse and evolving nature of crypto-assets while supporting harmonization and fostering a competitive market environment within the EU. Furthermore, ADAN recommends maintaining a balance that avoids overly rigid criteria that could quickly become obsolete. ADAN also recommends specific guidelines to differentiate between non-fungible tokens (#NFTs) and unique crypto-assets from traditional financial instruments to avoid unnecessary regulatory burdens on non-financial use cases. Regarding hybrid tokens, ADAN proposes a hierarchical assessment method to prioritize the token’s primary function, thereby ensuring a proportionate regulatory approach.
The Adan thanks the European Securities and Markets Authority for giving industry stakeholders the opportunity to provide feedback on the MiCA regulations. The Association’s objectives are to ensure that the European Union establishes a framework that fosters development and innovation in the crypto-asset industry.
