Circle director Patrick Hansen has resorted to X (Twitter) provide Comprehensive description of exemptions within EU markets in crypto-assets (MiCA) regulation. While MiCA is one of the most comprehensive crypto frameworks globally, Hansen’s thread highlights the complex landscape of crypto assets and activities that fall outside its regulatory purview.
Not all utility tokens are subject to MiCA regulations
The EU MiCA regulation has attracted immense attention as a landmark regulatory framework for the crypto industry. Designed to comprehensively address the complexities of crypto assets, it has become a focal point of discussion within the global cryptocurrency community. Hansen’s Insights takes a closer look at the key exemptions under the MiCA, highlighting activities that would not require regulatory approval.
Hansen first explains that utility tokens designed and used within a specific network are exempt from the provisions of the MiCA. Additionally, crypto-asset offerings that cater to fewer than 150 individuals per EU member state or to only qualified investors, totaling less than EUR 1 million over a 12-month period, fall outside the scope of the MiCA.
Furthermore, non-transferable digital assets are not subject to the regulatory framework of MiCA. In particular, the lending and borrowing of crypto-assets, including e-money tokens, is expressly excluded from the purview of the regulation.
Hansen also elaborated that crypto-asset services provided in a “fully decentralized manner” are exempt from regulatory oversight. Similarly, crypto-assets without a clear issuer and lacking a white paper are also outside the purview of MiCA.
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NFTs and CBDCs are not covered under MiCA
Hansen’s insight extends to the realm of NFTs (non-fungible tokens). While MiCA does not cover NFTs, digital art, or collectibles, certain fractional parts of NFTs, as well as those issued in wider series or collectibles, remain within the purview of the regulatory framework.
The exemption also applies to hardware or software providers of non-custodial wallets. Intragroup transactions, public entities, international organizations such as the IMF or BIS, and central bank digital currencies (CBDCs) are also excluded from the provisions of the MICA.
Hansen’s formula outlines that crypto-assets already classified as financial instruments under EU law, such as MiFID securities, are outside the regulatory purview of MiCA. Validators and miners are not classified as transfer service providers or crypto-asset service providers, and tokens created through mining or staking are also not subject to MiCA’s oversight.
Hansen’s careful explanation of MiCA’s crypto regulatory powers was appreciated by Paul Grewal, Chief Legal Officer at Coinbase. He tweeted, “Knowing what’s outside is as important as knowing what’s inside. This is an excellent summary.”
Hansen’s insight comes after the full approval of the MiCA framework by the EU Parliament, underscoring its importance in shaping the crypto regulatory landscape. As stakeholders prepare for the implementation of MICA, Hansen’s interpretation provides valuable guidance through the complexities of the new regulatory paradigm.
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Source: coingape.com
