The Vaduz MiCAR Roundtable, hosted at the University of Liechtenstein on October 4, 2024, delved into critical aspects of implementing the EU’s Markets in Crypto-Assets Regulation (MiCAR). Experts discussed challenges and proposed solutions related to compliance, fund management, and cross-border services.
Own Fund Requirements
Dr. Christian Steiner highlighted MiCAR’s rigid framework for Crypto-Asset Service Providers (CASPs), requiring fixed overhead-based calculations that disproportionately burden larger firms. Participants proposed integrating risk-sensitive factors and allowing the use of AT1 and Tier 2 instruments to provide flexibility. Excluding non-regulated services from overhead calculations was suggested to avoid inflated requirements for diverse business models.
Gas Fee Stations and Fund Segregation
Nina Gartmann addressed the challenges posed by Art. 75 MiCAR, which mandates strict segregation of client and provider assets. The discussion explored solutions like enhanced ledger-level segregation, clear contractual definitions of gas fees as client funds, and outsourcing gas fee management to third parties. These approaches aim to align with MiCAR’s requirements while minimizing operational complexity.
CASP Passporting and NCA Intervention
Alireza Siadat analyzed the relationship between cross-border service provision under Art. 65 and product intervention under Art. 105. Concerns about host National Competent Authorities (NCAs) undermining passporting through regulatory barriers were raised. Participants emphasized the importance of limiting interventions to specific risks and proposed creating a whistleblowing mechanism for CASPs facing unfair treatment.
Outsourcing to Non-EU/EEA Providers
Dr. Thomas Nägele highlighted MiCAR’s restriction on outsourcing key services to non-EU/EEA entities, posing challenges for companies relying on traditional outsourcing hubs like Switzerland. Suggestions included developing a “safe harbor” provision and exploring hybrid models to maintain compliance while leveraging third-country services.
Conclusion
The Vaduz MiCAR Roundtable underscored the need for regulatory adjustments to address the unique challenges of the crypto industry. Tailored solutions, such as flexible own fund frameworks, clear segregation standards, and harmonized cross-border practices, are essential. By refining these regulations, MiCAR can support innovation while maintaining robust safeguards, ensuring a balanced and competitive EU crypto market.
