ESMA Opened MiCA’s First Detailed Rulemaking Round

The European Securities and Markets Authority opened its first consultation on detailed rules under the European Union’s Markets in Crypto-Assets Regulation on July 12, 2023, moving MiCA from a recently enacted framework toward operational requirements for crypto businesses.

The 158-page package contained five draft regulatory technical standards and two draft implementing technical standards. They addressed notifications by already regulated financial firms, authorization applications for crypto-asset service providers, complaint handling, conflicts of interest and proposed acquisitions of qualifying holdings in service providers.

That made July 12 an institutional milestone rather than the start of new obligations. The proposals were drafts, comments were open through September 20, 2023, and the standards still required a final ESMA report and European Commission action. No exchange or wallet provider received a MiCA license through the consultation itself.

From framework law to operating detail

MiCA had been published in the EU’s Official Journal on June 9, 2023 and entered into force on June 29. Most of the regime was scheduled to apply from December 30, 2024, while its titles for asset-referenced tokens and e-money tokens were scheduled for June 30, 2024.

Those dates did not make the framework self-executing in every operational detail. MiCA assigned ESMA a series of mandates to specify the information, forms and procedures that national authorities and applicants would use. The July 12 package was the first public test of how that authority would be exercised.

For a business seeking authorization as a crypto-asset service provider, the draft called for information on ownership, management, governance, internal controls, business continuity, information-and-communications-technology systems and security arrangements. It also required details about the crypto services the applicant intended to provide. The practical consequence was that MiCA’s promise of a harmonized EU regime would depend on a substantial, document-heavy supervisory process rather than simple registration.

Complaints and conflicts moved into the rulebook

The proposed complaint-handling standard required complaints to be filed and handled without charge. It contemplated written decisions generally within two months after acknowledgment of receipt, with reasons and an expected delivery date if exceptional circumstances caused delay. Similar complaints were supposed to produce consistent decisions unless an objective justification supported a different result.

On conflicts of interest, ESMA proposed policies covering relationships among service providers, shareholders, managers, employees, clients and connected parties. The draft said proportionality should reflect the scale, nature and range of services, but should not permit a smaller provider to leave conflicts unprevented or unmitigated. Disclosures were to remain current and appear in the languages used to market or communicate with clients in a member state.

Those provisions mattered because many crypto groups combined activities that conventional finance often separates: trading venues, custody, token issuance, brokerage or proprietary positions. The package did not find that any named company had violated MiCA. It proposed the processes supervisors could use to evaluate and control those risks once the regime applied.

Ownership and market mapping

The consultation also addressed acquisitions of qualifying holdings in crypto-service providers. Proposed acquirers would have to supply information supporting assessments of reputation, financial soundness, management influence and the source of acquisition funds, including crypto-assets or other digital assets where relevant.

Separately, ESMA requested confidential market information from respondents, including expected turnover, planned white papers and the use of on-chain versus off-chain trading. The regulator said those answers would help calibrate later packages. They were a fact-finding exercise, not published measurements of the EU crypto market on July 12.

What remained unresolved

ESMA planned to consider responses and submit final draft standards to the European Commission by June 30, 2024. On July 12, neither the wording nor the eventual endorsement of those standards was settled. National transition arrangements, firm-specific licensing outcomes and the practical consistency of supervision across member states also remained open.

The defensible event-day conclusion was narrower: Europe’s landmark crypto law had entered its implementation phase, and the first detailed proposals showed that authorization, complaints, ownership and conflicts—not token prices—would define the next regulatory contest.