​Firms looking to get authorised in Ireland as a CASP or registered in near future as a VASP should note the following extracts from a speech today by Gerry Cross, Director for Financial Regulation, Policy and Risk at Blockchain Ireland's excellent event this week (see link at end of article) 

•  authorisation is a two way process. A successful process depends crucially on the preparation and approach of the applicant.

 

• key aspects of a successful application, include:

 

1. TRANSPARENCY: (a) firms should act in a fully transparent and open manner with respect to their proposed application; (b) if an applicant is applying in multiple EU jurisdictions for a MiCAR activity the CBI says the firm must disclose this in its application;
2. PREPARATION: (a) firms should prepare well and be appropriately resourced to engage with the CBI 'in a comprehensive and timely manner throughout the assessment process'; (b) preparation also means that firms understand the local regulatory environment.
3. SUPERVISIBILITY: authorised firms should operate with strong local autonomy and be accountable for all aspects of the local entity. Where we identify obstacles to firm’s meeting this expectation, they will not be authorised.
4. CONSUMER FOCUS: firms should ensure that securing customer interests is at the core of their business. This is particularly the case for retail facing business models. [and remember, a 'consumer' are not just people; it covers certain legal persons too].

Source: Technological innovation and financial regulation – a maturing relationship - Remarks by Gerry Cross, Director for Financial Regulation, Policy and Risk, Wednesday 29th May 2024

​Linkedin Post:  https://www.linkedin.com/posts/peteroakes_micar-virtualasset-activity-7201513163152834560-N6m7

Of the many points made by ESMA in its letter, the following ones caught our eye.

 

1. NCAs (national competent authorities) need to establish as early as possible their supervisory procedures related to the authorisation regimes set out in the MiCA Regulation, including simplified authorisation procedures for entities already authorised to provide crypto-asset services under national law.
2. each Member State to designate without delay the NCAs responsible for carrying out the functions and duties provided for in the MiCA Regulation.
3. that NCAs are granted adequate powers and resources to exercise their supervisory, investigative and enforcement responsibilities.
4. ESMA is concerned that an extensive use of the grand-fathering clause for entities already providing crypto-asset services would weaken the effectiveness of the MiCA rulebook. This is because the clause may allow these entities to continue operating for up to 18 months in accordance with applicable national laws.

• Copy of ESMA 17 October 2023 letter - HERE
  
• Linkedin Post - HERE

Following the Permanent Representatives’ Committee meeting of 5 October 2022 which endorsed the final compromise text with a view to agreement, the Chair of the Committee (Edita Hrd) has written a letter and Proposal for a Regulation of the European Parliament and of the Council on Markets in Crypto-assets, and amending Directive (EU) 2019/1937 (MiCA) to the Chair of the Committee on Economic and Monetary Affairs (Irene TINAGLI) saying:

"that, should the European Parliament adopt its position at first reading, in accordance with Article 294 paragraph 3 of the Treaty, in the form set out in the compromise package contained in the Annex to this letter (subject to revision by the legal linguists of both institutions), the Council would, in accordance with Article 294. paragraph 4 of the Treaty, approve the European Parliament's position and the act shall be adopted in the wording which corresponds to the European Parliament's position."

The full legal text of the landmark legislation known as the Markets in Crypto Assets Regulation (MiCA), alongside a further law to reveal the identity of those making crypto payments.
At a Wednesday meeting (5th October 2022), diplomats representing the bloc's member governments in the EU's Council signed off on the text of laws (see link above) which were the subject of political deals struck in June.

MiCA introduces the first-ever licensing regime for crypto wallets and exchanges to operate across the bloc and imposes reserve requirements on stablecoins that are intended to avoid Terra-style collapses. A separate law on funds transfers requires wallet providers to check their customer's identity, in a bid to cut money laundering.
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See also CoinDesk Article here