MiCAR-Overview and Trever’s Initiatives being fully compliant

It particularly focuses on combating money laundering and terrorist financing, protecting market integrity by preventing market abuse, improving competitive conditions and enhancing investor and consumer protection. ¹

When does the regulation come into force?

On 30 June 2024, requirements for issuers of e-money tokens and asset reference tokens started to apply. On 30 December 2024, the remaining requirements will come into force and all issuers and crypto asset service providers will have to comply with MiCAR.

However, there is a transition period until December 2025 for companies that have already provided crypto-asset services before December 30, 2024. In Germany, for example, CASPs in grandfathering are expected to be able to provide their services without a separate MiCAR licence until the end of June 2026.

Who has to be MiCAR-compliant?

MiCAR includes market participants that issue crypto assets or provide related services in the EU, so-called Crypto Asset Service Providers (CASP). This includes in particular the following services:

• providing custody and administration of crypto assets on behalf of clients
• operation of a trading platform for crypto assets
• exchange of crypto assets for funds or for other crypto assets
• execution of orders for crypto assets on behalf of clients
• placing of crypto assets
• reception and transmission of orders
• providing advice and portfolio management
• providing transfer services ²

Which digital assets are included?

The regulation focuses on following categories:

1. E-money Tokens: Refers to crypto assets whose primary purpose is to act as a medium of exchange. A nominal currency is used as a reference base to ensure value stability.
2. Asset-Referenced Tokens: A type of crypto asset that is not an e-money token and uses different nominal currencies, commodities, or other crypto assets as a reference base, as well as combinations of these elements, to achieve a stable value.
3. Utility Tokens: Tokens, that provide digital access to services, applications, or resources and can only be accepted by the issuer of that token.
4. Other Crypto Assets: Crypto Assets other than value-referenced tokens or e-money tokens, such as Bitcoin or Ether. ³

What initiatives did Trever take being fully MiCAR-compliant?

Trever brings a wealth of expertise from working with leading European financial institutions, allowing to deeply understand their specific needs with all necessary steps completed being fully MiCAR-compliant:

“1. Business Continuity Trever provides clients with a comprehensive business continuity plan to enable the uninterrupted operation of the services. This includes identifying critical services, risk management processes, and crisis management. Regular tests and updates ensure full preparation to maintain service continuity at all times which is primarily relevant for MiCAR Article 68 (7-9).

2. ICT Risk Management To ensure the security, integrity, availability, and confidentiality of client data, Trever offers a robust ICT risk management framework that complies with both DORA and GDPR. The systems include risk assessments, detailed descriptions of third-party services, and contracts. To enable maximum protection, Trever conducts third-party cybersecurity audits covering areas like vulnerability assessments, penetration tests, and secure software development. This is primarily relevant for MiCAR Article 73.

3. Pricing Methodology To assist with pricing, Trever uses a transparent methodology based on real-time market data from reliable venues. Comprehensive post-trade information including spread and fees are transparently communicated ,and is therefore compliant with Article 77 MiCAR.

4. Execution of Orders Trever provides clients with a best execution mechanism to enable the best results for trades, and therefore ensured compliance with Article 78. This includes among other things:

• Consideration of the execution factors price, costs, speed, probability of execution and settlement, order type.
• Supporting the requirements regarding best execution policies
• Providing relevant data for ongoing monitoring of order executions”

By implementing these key measures, Trever remains focused on providing a fully compliant and secure environment for crypto asset services. Get to know the solution: https://trever.io/contact/

Sources:

¹ MiCAR – neue Verordnung sorgt für EU-weite Veränderungen im Kryptomarkt. (o. D.). In Deloitte. https://image.marketing.deloitte.de/lib/fe31117075640474771d75/m/2/f60b2728-38c7-4c5a-a88b-b67da589cb31.pdf

² Crypto Asset Service Provider under MiCAR. (2024). FinPlanet. https://www.linkedin.com/feed/update/urn:li:activity:7247145701447503872/

³ Markets in Crypto Assets Regulation. (2023). In KPMG AG. https://hub.kpmg.de/hubfs/LandingPages-PDF/kpmg-markets-in-crypto-assets-regulation.pdf

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