- The European Union is shifting to common MiCA regulations by December 30, 2024.
- Cyprus’ CySEC is freezing CASP applications to prepare for the new rules.
- Transitional provisions will allow CASPs to operate until July 2026 without new authorization.
The European Union (EU) is preparing to fully implement its Markets in Crypto-Assets (MiCA) regulations by December 30, 2024. This shift will standardize crypto-asset service providers (CASPs) across the EU, replacing national laws with a unified framework. This major regulatory change will affect how crypto companies operate, bringing in strict requirements for authorization and oversight.
MiCA regulations have already come into effect for issuers of Asset Referenced Tokens (ARTs) and E-Money Tokens (EMTs) as of June 30, 2024. However, the broader application to CASPs will follow later this year. This comprehensive regulatory package aims to ensure consumer protection, market integrity, and financial stability across the EU’s crypto markets.
CySEC’s Role in the Transition
The Cyprus Securities and Exchange Commission (CySEC) has taken the lead in preparing for MiCA’s full implementation. As it gears up for the new rules, CySEC recently announced a freeze on CASP applications under the current national framework. The regulator made it clear that no more applications will be accepted under the existing system after October 30, 2024.
CySEC has also advised market participants to familiarize themselves with the transitional provisions of Article 143(3) of MiCA. Under this clause, CASPs that were registered before December 30 can continue offering their services until July 1, 2026. However, they must obtain proper authorization to comply fully with the new EU-wide regulations during this period.
CySEC Urges Crypto Firms to Prepare for MiCA Compliance
In anticipation of MiCA’s requirements, CySEC has encouraged companies to prepare their applications based on draft technical standards published by the European Securities and Markets Authority (ESMA). These standards are designed to streamline the authorization process, ensuring that crypto service providers can transition smoothly into the MiCA regime.
Entities offering crypto services under the EU’s existing investment laws must also be aware of MiCA’s provisions. For example, those authorized under Cyprus’ Investment Services Law will need to comply with specific MiCA requirements outlined in Article 60.
CySEC’s proactive stance is seen as a model for other regulators within the EU, as it ensures market participants are well-prepared for the upcoming regulatory changes.
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