First EU Legislation on cryptocurrency: MICA

First EU Legislation on cryptocurrency: MICA

On 20th of April 2023, the European Parliament has finally voted and adopted the new legislative changes in the European Union concerning cryptocurrency in the form of the Markets in Crypto Assts (MICA) Regulation. Moreover, since MICA is the Regulation, it is directly applicable among the Member States without a need for any additional transposition into national law.

The main provisions of the Regulation are focused on the following:

  • The issuance and trading of crypto assets in accordance with transparency and disclosure requirements.
  • Introduction of the licensing for the crypto asset service providers and their regulatory requirements.
  • First introduction of the measures against market abuse, money laundering, terrorist financing and other criminal activities and money laundering activities/

MiCA provides the definition of a crypto-asset as “a digital representation of value or rights which may be transferred and stored electronically, using distributed ledger technology or similar technology.” The Regulation establishes a distinction between ‘cryptocurrencies’ on one side and ‘tokens’ on the other. MiCA also sets requirements for cryptoasset issuers and cryptoasset service providers (CASPs). In case of the cyptoasset issuers must provide complete and transparent information about the cryptoassets they issue, and comply with disclosure and transparency rules. Cryptoasset service providers must be registered and act in accordance with security measures and anti-money laundering compliance.

We would like to emphasize on the importance of the new Regulation for stronger protection of the consumers in the crypto market and creation of the beneficial regulatory system for the investments and innovations.

As from the tax perspective, we will monitor the situation on the daily basis in order to follow the updates from the Member States, whether they are going as well to enact any tax legislation, which would follow the main provisions of MICA.

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