Recently, European Union institutions have intensified their work on the draft Regulation of the European Parliament and of the Council on markets in cryptocurrencies and amending Directive (EU) 2019/1937 (hereinafter referred to as "MiCa"). This regulation aims to unify the legal framework for the operation of the cryptocurrency market within the European Union. Despite striving for maximum comprehensiveness, the question remains whether MiCa can actually meet this requirement.
In particular, attention should be paid to the scope of the regulation. Article 2(3) of the MiCa indicates which crypto-assets are not covered by the provisions of the act. The category of financial instruments specified in Article 4(1)(15) of Directive 2014/65/EU is crucial. Therefore, crypto-assets constituting transferable securities or derivatives may be considered financial instruments in particular.
There is no doubt that in recent years, the greatest legal uncertainty has been associated with the issuance of investment tokens. On the one hand, the entity responsible for issuing such assets could be held criminally or administratively liable for failure to meet certain legal requirements. On the other hand, a lawful issuance was impossible because existing regulations were not adapted to the issuance of such innovative instruments. Issuers found themselves in a kind of deadlock, and the MiCa, as currently drafted, does not address this issue. If a given country lacks national legal standards governing the issuance of investment tokens, as is the case in Poland, the issuance of such assets will continue to be problematic.
MiCa focuses primarily on regulating stablecoins and utility tokens. It's questionable whether these changes will prove beneficial for issuers of these cryptoassets. Nevertheless, the lack of regulation for investment tokens can be considered a drawback of the proposed regulation. Many entities, in order to increase the attractiveness of the cryptoasset they issue, incorporate typically investment-related features, such as the ability to make decisions regarding the project or the right to passively earn profits related to the project. In certain situations, if such rights predominate, a given cryptoasset may be deemed investment-related.
To sum up, it should be pointed out that even if we assess the solutions proposed by the MiCa project positively, the lack of regulation of investment tokens leaves us somewhat dissatisfied, especially considering that the next major regulation at the EU level may not be adopted until many years from now.
This alert is for informational purposes only and does not constitute legal advice.
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