For providers of services and trade related to cryptocurrencies, the EU’s regulatory corset is becoming increasingly strict. The Markets in Crypto Assets Regulation (MiCAR) will become fully applicable on Monday. The regulation is intended, among other things, to increase investor protection and simplify the fight against money laundering.
In Austria, the Financial Market Authority (FMA) supervises the crypto market. “The Wild West era in the crypto markets is over,” FMA board members Helmut Ettl and Eduard Müller announced in a press release. The board members expect the new supervisors to “comply with the law, conduct responsible business and protect customers at all times.”
This means that approval procedures for crypto providers will become stricter; providers of services such as custody, exchange or advice relating to cryptocurrencies must now have sufficient capital, robust risk management, appropriate internal control systems and transparent information about their business model.
Owners, managers and other senior figures must also meet Fit & Proper requirements, which assess their qualifications and honesty.
If the requirements are not met, sanctions may be imposed
The MiCAR contains special rules for so-called Asset-Referenced Tokens (ART) and E-Money Tokens (EMT). These are crypto assets whose performance is linked to other assets such as commodities or official currencies and are also called ‘stablecoins’. In the future, providers will have to comply with legal requirements in the areas of capital resources, repurchase rights and special information obligations.
Providers of other crypto assets that do not fall under the rules for ART and EMT will also have to provide more extensive information (white paper) in the future. According to the FMA, the characteristics of the crypto asset, its technical basis, the economic concept, the risk factors and the rights and obligations for investors must be explained “fairly, clearly and not misleadingly”.
Providers that do not meet these requirements should expect ‘strict supervisory measures and sanctions’, the regulator continues. For consumers, the regulation mainly means “more safety, transparency and legal clarity”.
DORA also strengthens IT security
In addition to MiCAR, the Digital Operational Resilience Act (DORA) will also be applied from January 17. Above all, this ensures greater IT security and operational resilience of financial market participants. Cryptocurrency providers must also submit technical security and crisis management concepts.
The FMA requires affected companies to “fully monitor and secure their IT systems, carry out regular stress tests and have clear contingency plans in place to respond in the event of cyber attacks or system failures”.
Source: Krone
I’m Ben Stock, a journalist and author at Today Times Live. I specialize in economic news and have been working in the news industry for over five years. My experience spans from local journalism to international business reporting. In my career I’ve had the opportunity to interview some of the world’s leading economists and financial experts, giving me an insight into global trends that is unique among journalists.
