The rules set out in MiCAR regarding the authorisation and supervision of crypto-asset service providers have been in force since the end of 2024. For these service providers, good preparation is essential: BaFin must decide quickly on their applications.

By Beatrice van Trill, Jessica Beikircher, Miriam Grabow and Oliver Stade, BaFin Supervision of Crypto-Asset Service Providers

The final step has now been completed – the European Markets in Crypto-Assets Regulation, abbreviated as MiCAR, has been applicable in full since the end of 2024. The requirements regarding the authorisation and supervision of crypto-asset service providers (CASPs), for example, set out in Title V of MiCAR, have been applicable since 30 December 2024.

A crypto-asset is a digital representation of an asset or a right that can be electronically transferred between users and stored. The transfer is carried out by means of distributed ledger technology (DLT) or similar technology.

First comprehensive European regulatory framework

The background: MiCAR constitutes the first harmonised European regulatory framework for crypto-assets and CASPs (see info box “What does MiCAR regulate?”). The objective of MiCAR is to increase investor protection, prevent money laundering and terrorist financing, ensure the functioning of the markets and maintain financial stability. The Regulation also creates legal certainty for innovations in the field of distributed ledger technology.

 

At a glanceWhat does MiCAR regulate?

The European Markets in Crypto-Assets Regulation – MiCAR – regulates the issuance of crypto-assets (primary market) and crypto-asset services (secondary market).

MiCAR comprises the following:

1. Transparency and disclosure requirements for

• the issuance (applicable since 30 June 2024) and
• trading of crypto-assets (applicable since 30 December 2024)

2. The authorisation requirement for

• issuers of crypto-assets (applicable since 30 June 2024) and
• CASPs (applicable since 30 December 2024)

3. Requirements for the supervision of

• issuers of crypto-assets (applicable since 30 June 2024) and
• CASPs (applicable since 30 December 2024)

4. Rules for the proper business organisation of

• issuers of crypto-assets (applicable since 30 June 2024) and
• CASPs (applicable since 30 December 2024)

5. Rules regarding investor and consumer protection for the issuance, trading and custody of crypto-assets (applicable since 30 June 2024)

6. Rules for the prevention of market abuse on cryptocurrency exchanges (applicable since 30 December 2024)

7. Regulations on the adoption of product intervention measures (applicable since 30 December 2024)