EU To Implement MiCA Regulations For Crypto Asset Service Providers By December 30

According to Cointelegraph, the European Union will transition from national laws on crypto asset service providers (CASPs) to common Markets in Crypto-Assets (MiCA) regulations by December 30. The Cyprus Securities and Exchange Commission (CySEC) is exemplifying this transition by freezing CASP applications and alerting market participants to upcoming changes. The CySEC announced that it will no longer accept CASP applications under Cypriote national laws as of October 17. CASPs that successfully register under national laws before the December 30 deadline will be allowed to operate under that jurisdiction until July 1, 2026, unless they are granted or refused authorization under MiCA Article 63 before then. Once MiCA regulations are in effect, CASPs will be subject to the European Commission’s Regulatory Technical Standards and the Implementing Technical Standards. Although these standards have not yet been published, the CySEC advised interested parties to refer to the Draft Technical Standards issued by the European Securities and Markets Authority (ESMA). On October 30, the CySEC will cease accepting notifications under its national rules from entities in the European Economic Area intending to provide services in Cyprus. Entities that file a notification before this date will be able to operate under the same conditions as local entities until July 1, 2026. Currently, Cyprus-based entities can offer crypto asset services in the EU under any of three national laws. The CySEC reminded these entities to study the ESMA standards in preparation for the transition to MiCA. Other regulators have also expressed concerns. The Dutch Authority for the Financial Markets announced in September that it was investigating potential market manipulation schemes ahead of the MiCA transition. Such fraud would be more easily detected and explicitly prohibited under the new, more transparent regulations. ESMA has recommended additional changes to MiCA, including requiring CASPs to undergo cybersecurity audits and pass thorough background checks. The European Parliament passed the MiCA regulation in April 2023, and regulations concerning stablecoins came into force on June 30.