Schjødt update on MiCA

The primary goal of MiCA is to foster confidence in crypto markets through investor protection with respect to fungible crypto assets, while offering regulatory certainty for companies that operate within this industry in the EU/EEA area. MiCA seeks to achieve this trough transparency and accountability standards for crypto asset issuers and crypto asset service-providers. 

The rules for the crypto asset service-providers (CASPs)are modelled on the rules applicable to investment firms (MiFID). CASPs will have to be licensed. MiCA allows market participants to obtain licensing in one country and passport their services to other EU/EEA area countries. CASPs will also have to implement KYC systems and establish custody policies for the safekeeping of customer funds.

MiCA sets out rules, not dissimilar to the relevant rules applicable in securities markets, with respect to disclosures of inside information and prohibitions on insider dealing, unlawful disclosure of inside information and market manipulation.

MiCA impacts crypto issuers and CASPs operating within or offering services to EU/EEA-area residents. 

On 29 April 2025, ESMA published supervisory guidelines to prevent market abuse under MiCA (ESMA75-453128700-1408).

The MiCA market abuse rules are based on those of the Market Abuse Regulation. However, the underlying instruments/assets are very different: For example, it is difficult to conceive what circumstances or information that are likely to have a significant effect on the prices of a crypto-asset or related crypto-asset, compared to financial instruments or derivative instruments.

Notwithstanding, ESMA recommends supervisory authorities to integrate their measures to prevent market abuse in crypto assets into their existing supervisory practices with respect to financial instruments.

ESMA mentions that competent authorities could include in their monitoring activity practices that may stem from the specific technology behind crypto-assets, such as abusive MEV (maximal extractable value) strategies, or the way they are offered or evaluated (e.g. token supply manipulation or, for stablecoins, the assessment of the backing assets).

ESMA also mentions monitoring social media to cover information posted on crypto assets, given the higher risk of spreading false or misleading information that such media may pose in the crypto environment in comparison to traditional financial markets.

MiCA has been met with some criticism – for not taking sufficiently into account the particularities of crypto assets. The MiCA market abuse guidelines are also having this issue. In our view, the recommendation from ESMA risks producing inappropriate monitoring mechanisms and producing false positives while overlooking real instances of market abuse.

As Norway is not an EU member state, implementing EU legislation requires amending the appendices to the EEA Agreement, and adopting implementing national rules. Both are now on track to be completed by summer 2025, meaning that MiCA can apply from 1 July 2025. We expect some transitional rules to be adopted, in order to give currently active CASPs time to obtain the relevant license. The sheer volume of rules adopted in recent years, combined with the supranational competencies of the EU financial supervisory authorities, which is not directly possible under the EEA Agreement, has led to a build-up of EU single market legislation not implemented in Norway. The Norwegian Ministry of Finance is currently trying to reduce this backlog which has been pointed out by the Commission, but there is still a sizeable queue. Likely, this will not be possible to solve fully without more fundamental changes to either EU lawmaking or the EEA Agreement (or EU membership).

Currently, there are 10 undertakings registered under the old rules of the AML-directive for custodian wallet providers (for holding, storing or transferring virtual currencies). We expect all or most of these to apply for license as a CASP.

MiCA has entered into force in both Denmark and Sweden. In Denmark, approximately 8 CASPs are already licensed, with more expected to follow as companies previously registered as Virtual Asset Service Providers transition to the new regime, provided they meet the updated licensing requirements. In Sweden however, this number is still zero.

To support the transition, the Danish Financial Supervisory Authority (DFSA) has published a Danish-language application form for both CASP licensing and for financial institutions notifying the DFSA of their crypto-asset services. The form is available on the DFSA's website and includes references to relevant delegated acts and guidance on the required documentation.Concluding remarksAt this point, the European crypto market is not a mature market by any measure. A well-functioning market depends on a sufficiently large and varied asset pool, trading and settlement platforms, brokers and not least investors.

Within digital assets, CASPs, retail investors and institutional investors (such as AIFs) depend to a large degree on trading and settlement platforms established outside the EU/EEA. MiCA will also, all else being equal, reduce the asset pool because of obligations on issuers previously unregulated. ESMA has previously also underlined that there is a high reliance on the US dollar and the South Korean won as the market’s on- and off-ramp, while euro only plays a minor role ("Crypto assets: Market structures and EU relevance", 10 April 2024). This means an additional level of risk for both investors and CASPs, aggravated by recently increased volatility in debt and currency markets.