In this post we will analyse what are the legal requirements that the issuers of crypto assets, other than stablecoins (asset-reference tokens or e-money tokens), including utility tokens (hereinafter “non-stablecoins”), who offer such crypto assets to the public or seek an admission of such crypto-assets to trading or trading platform in the context of Title II of EU Markets in Crypto Assets regulation (hereinafter the “MiCA”), should comply with.
Article 4, of MiCA, sets out the requirements which must be met in order for an issuer to be entitled to offer non-stablecoins to the public in the Union or seek an admission to trading on a trading platform for such crypto-assets. These requirements for issuers include:
- to be a legal entity;
- drafting a crypto-asset white paper in respect of those crypto-assets; All information referred in White Paper shall be fair, clear and not misleading. The White Paper shall not contain material ommissions and shall be in a concise and comprehensive form.
- Notification of crypto-asset White Paper;
Article 7 of Mica sets out where and when it is required for issuers of non-stablecoins (crypto-assets other than asset reference tokens or e-money tokens) to notify the White Paper. Issuers of non-stablecoins shall notify the white paper to the competent authorities and also they must notify their marketing communications to the competent authority of their Home Member State at least 20 working days before publication of white paper.
The issuers must provide also to the competent authority of their Home Member States with a list of the Host Members States if any, where they intend to offer their crypto assets to the public or intend to seek admission to trading or trading platform for crypto-assets. They shall also inform their home Member State of the starting date of the intended offer to the public or intended to admission to trading. - Publication of the white paper
In accordance with article 8 of Mica, Issuers of non-stablecoins shall publish their white paper on their website and where it is applicable their marketing communications. The white paper must be publicly accessible by no later than the starting date of the offer to the public of those crypto assets or the admission of those crypto-assets to trading on trading platform. The White paper shall remain available on the issuer’s website for as long as the crypto assets are held by the public. - conformity with the requirements in Article 13.
Issuers of non-stable crypto assets shall act honestly, fairly and professionally. They must communicate with the holders of crypto-assets in a fair, clear and not misleading manner. They shall prevent, identify, manage and disclose any conflict of interest that may arise and they shall maintain all of their systems and security access protocols to appropriate Union standards.
Issuers of non-stablecoins shall act in the best interest of the holders of such crypto-assets and shall treat them equally unless any preferential treatment is disclosed in the White Paper and where applicable, the marketing communication.
Exceptions from producing, notify and publishing the White Paper
It must be noted that in some cases it not required for the issuers of non-stable coins to draft, notify and publish the White Paper:
Therefore, the paragraphs b to d above shall not be applied in the following cases, when:
- the crypto-assets are offered for free;
- the crypto-assets are automatically created through mining as a reward for the maintenance of the DLT or the validation of transactions;
- the crypto-assets are unique and not fungible with other crypto-assets;
- the crypto-assets are offered to fewer than 150 natural or legal persons per Member State where such persons are acting on their own account;
- over a period of 12 months, the total consideration of an offer to the public of crypto-assets in the Union does not exceed EUR 1 000 000, or the equivalent amount in another currency or in crypto-assets;
- the offer to the public of the crypto-assets is solely addressed to qualified investors and the crypto-assets can only be held by such qualified investors.
In our next post, we will analyse what must be the content and form of the crypto-asset White Paper.
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