ARTICLE
31 January 2025

Guidelines From The ESAs Ensuring Consistency In Crypto-Asset Classification

H
Harneys

Contributor

Harneys is a full-service offshore law firm offering expert legal advice on the laws of jurisdictions including the British Virgin Islands, Cayman Islands, Luxembourg, and more. Established in 1960, the firm has grown to 11 global locations with over 180 lawyers, serving top law firms, financial institutions, investment funds, and high-net-worth individuals. Harneys provides comprehensive legal support across transactional, contentious, and private client matters, often in collaboration with Harneys Fiduciary, which delivers corporate and wealth management services. Known for its role in shaping offshore jurisprudence, the firm also advises on legislative developments and excels in handling complex cross-border transactions and disputes.

On 10 December 2024, the European Supervisory Authorities, consisting of the EBA, EIOPA, and ESMA (the ESAs) introduced joint guidelines (the Guidelines) to standardise the regulatory classification.
Cyprus Technology

On 10 December 2024, the European Supervisory Authorities, consisting of the EBA, EIOPA, and ESMA (the ESAs) introduced joint guidelines (the Guidelines) to standardise the regulatory classification of crypto-assets under the Markets in Crypto-Assets Regulation (MiCAR). These Guidelines aim to harmonise industry practices and supervisory approaches, ensuring a consistent and fair regulatory environment across the EU.

Key highlights of the Guidelines

Standardised classification test:

  • A uniform test has been introduced to classify crypto-assets and determine their regulatory status under MiCAR.
  • This ensures that market participants and regulators apply a consistent framework when assessing crypto-assets.

Templates for legal opinions and explanations:

The Guidelines include templates for the regulatory classification of:

  • Asset-Referenced Tokens (ARTs): White papers would be accompanied by a legal opinion explaining why an ART is not an electronic money token (EMT) and why it is not excluded from the scope of MiCAR.
  • Other Crypto-Assets: White papers must include explanations which clarify the reasons that the crypto-asset is not an EMT, ART, or a crypto-asset excluded from MiCAR.

Promoting regulatory convergence:

These measures aim to reduce regulatory arbitrage, enhance consumer and investor protection, and establish a level playing field in the crypto-asset market.

The Guidelines will be translated in all official EU languages and take effect three months after the publication of the translations on the ESA's websites. These efforts mark a crucial step toward a more transparent and regulated crypto-asset landscape.

MiCAR, which regulates the issuance and trading of ARTs, EMTs, and other crypto-assets, seeks to ensure market integrity and financial stability while providing robust protections for consumers and investors. By harmonising classification practices, the ESAs aim to streamline the application of MiCAR.

For more details, the EBA's press release can be found here and the Guidelines here.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

Mondaq uses cookies on this website. By using our website you agree to our use of cookies as set out in our Privacy Policy.

Learn More