ESMA and the European Commission publish guidance on non-MiCA compliant ARTs and EMTs

Purpose
The European Securities and Markets Authority (ESMA) has published a statement to reinforce its position on the offer of Alternative Trading Systems (ARTs) and EMTs (also known as stablecoins) in the EU under Market in Crypto Assets regulation (MiCA). The statement aims to provide guidance on how and under which timeline Certified Asset Service Providers (CASP) are expected to comply with the requirements of Titles III and IV of MiCA. This clarification is intended to facilitate coordinated actions at the national level and avoid potential disruptions.

Effects on Industry
The ESMA’s statement and the accompanying European Commission Q&A are expected to have significant implications for the crypto asset industry, particularly for Certified Asset Service Providers (CASP). CASPs will need to ensure compliance with Titles III and IV of MiCA, which include requirements for transparency, disclosure, and risk management. Non-compliant ARTs or EMTs must be discontinued by the end of Q1 2025 at the latest. This may lead to significant changes in business practices, operational procedures, and potentially even the closure of non-compliant operations.

Relevant Stakeholders
The ESMA’s statement affects various stakeholders in the crypto asset industry, including:

• Certified Asset Service Providers (CASP)
• National Competent Authorities (NCAs)
• Crypto-asset service providers
• Regulated entities offering ARTs and EMTs

These stakeholders are required to comply with Titles III and IV of MiCA, which include requirements for transparency, disclosure, and risk management.

Next Steps
To comply with the ESMA’s statement, CASPs must:

• Review their operations and ensure compliance with Titles III and IV of MiCA
• Update their business practices and operational procedures to meet the new requirements
• Discontinue non-compliant ARTs or EMTs by the end of Q1 2025 at the latest

Additionally, NCAs are expected to ensure compliance by CASPs regarding non-compliant ARTs or EMTs as soon as possible, and no later than the end of Q1 2025.

Any Other Relevant Information
The ESMA’s statement is part of a broader effort to establish a regulatory framework for the crypto asset industry in the EU. The Market in Crypto Assets regulation (MiCA) aims to provide a harmonized approach to regulating crypto assets across the EU, ensuring consistency and coordination among national authorities. This clarification on ARTs and EMTs is an essential step towards achieving this goal.