Regulation (EU) 2023/1114 of the European Parliament and of the Council of May 31, 2023 on MiCA (Markets in Crypto-Assets), Règlement (UE) 2023/1114 du Parlement européen et du Conseil du 31 mai 2023 sur les marchés de crypto-actifs, adopted by the European Parliament and the Council on May 31, 2023, came into force on December 30, 2024.
It establishes a harmonized framework for the regulation of crypto-assets within the European Union, including Bitcoin.
I. Objectives and scope of the MiCA regulation
The main aim of the MiCA regulation is to protect consumers and ensure financial stability, while combating money laundering and the financing of terrorism.
It establishes a specific normative framework for crypto-assets, including Bitcoin, distinguishing three main categories:
- Utility tokens, which provide access to a specific product or service;
- Tokens referring to one or more assets often associated with property rights or underlying assets; and
- Electronic currency tokens (stablecoins) that are directly linked to a fiat currency or a basket of fiat currencies.
Although Bitcoin does not fit into any of these categories directly, it is nevertheless subject to some of the regulations established by MiCA.
II. Obligations for Bitcoin creators
1. Registration and licensing
Bitcoin creators, as actors enabling the management or facilitation of the use of Bitcoin within the EU (for example, exchange platforms or custody service providers), must obtain approval from a national competent authority before they can offer their services on the European market.
Approval provides a European passport, making it easier to offer services in all EU member countries.
2. Transparency and information
Bitcoin creators must ensure that information about the services they offer is transparent and accessible.
An information document, or “white paper”, must be drawn up, detailing:
- The characteristics of Bitcoin ;
- The risks associated with their use; and
- The costs and fees associated with Bitcoin transactions.
This document must comply with the transparency and information requirements of the MiCA regulation, which requires disclosure of all relevant information so that consumers can make an informed decision.
3. Anti-money laundering (AML)
MiCA requires Bitcoin creators to comply with anti-money laundering (AML) and combating the financing of terrorism (CFT) rules.
In concrete terms, this involves the obligation to track user transactions and set up a system for tracing crypto-asset transfers.
Providers must also verify the identity of their customers and report any suspicious activity to the relevant authorities.
4. Specific obligations for crypto-asset service providers (CSPs)
Crypto-asset service providers (CASSPs), such as Bitcoin exchange platforms or storage services, must meet strict requirements to operate legally in the EU. Among the points to watch out for:
Obtaining approval:
Check that PSCAs have obtained the necessary approval to offer exchange, storage or other Bitcoin-related services in the EU ;
Anti-money laundering rules:
Ensure that PSCAs comply with AML and CFT requirements;
Internal control and compliance:
Confirm that PSCAs must implement an internal control system to ensure compliance with regulatory obligations, particularly with regard to the security of user funds and risk management; and
European passport:
Verify that PSCAs can benefit from the European passport to offer their services throughout the EU once they have obtained their license.
5. Consumer protection and transparency
The MiCA regulation aims to guarantee consumer protection and ensure transparency in trading with crypto-assets, including bitcoin.
As such:
Publication of the white paper:
Bitcoin creators must publish a document detailing the risks, costs and implications of transactions.
Consumer information:
Ensure that consumers are fully informed of the risks involved in using Bitcoin and the costs associated with each transaction.
PSCA behavior:
PSCAs must act honestly, fairly and professionally in accordance with the standards of transparency and accountability imposed by MiCA.
6. Prevention of market abuse
Market abuse prevention rules applicable to crypto-assets must be observed, in order to combat market manipulation and fraud.
Bitcoin creators must ensure that transactions on their platforms are not used to manipulate prices or conduct illegal activities.
7. Transitional period and national adaptation
Service providers already registered under national regimes have a transitional period until July 1, 2026 to comply with the requirements of the MiCA Regulation.
Bitcoin creators will have to ensure that their practices comply with European requirements by this deadline.
In France, national adaptations are to be put in place to facilitate this transition, with enhanced registration requirements for crypto-asset service providers.
III. Combating fraud and tax evasion
MiCA is part of a broader framework to combat tax evasion.
Crypto-asset service providers must comply with specific reporting obligations and ensure that Bitcoin exchanges are transparent, with automatic exchanges of tax information between competent authorities.
The new tax obligations must be strictly complied with to avoid the risk of fraud.
Nicolas BRAHIN Avocat
Lawyer in NICE
Master’s Degree in Banking and Financial Law
Cabinet BRAHIN Avocats 1, Rue Louis Gassin – 06300 NICE (FRANCE)
MOB: +33 493 830 876 / Fax : +33 493 181 437
Email : nicolas.brahin@brahin-avocats.com
www.brahin-avocats.com
