Note On Markets In Crypto Regulation (MiCAR) – Fin Tech

From VASP to CASP from a Liechtenstein perspective

1. From VASP (Virtual Asset Service Provider) to CASP (Crypto
   Asset Service Provider) – on October 10, 2022, the European
   Parliament’s Committee on Economic and Monetary Affairs (ECON)
   endorsed the text for the MiCAR (Markets in Crypto Assets
   Regulation; Proposal for a Regulation of the European Parliament
   and of the Council on Markets in Crypto-assets, and amending
   Directive (EU) 2019/1937, COM/2020/593 final), which sets out a
   harmonized crypto regulatory framework that supports innovation and
   fair competition while ensuring market integrity and a high level
   of protection for retail users.




2. This will also be relevant for Liechtenstein once implemented
   into the acquis communautaire of the European Economic
   Area (EEA) through an EEA Joint Committee Decision (JCD).




3. Subject to final amendments, currently registered VASPs with
   the Liechtenstein Financial Market Authority (FMA) will have an
   18-month transition period pursuant to Art 123 MiCAR to implement
   subsequent changes to the so-called Liechtenstein Blockchain or
   DLT¹ Act (TVTG² ) and fully comply with MiCAR
   regulation.




4. The Rules of MiCAR are similar to the already enacted
   Liechtenstein Blockchain Act (TVTG). Liechtenstein based and
   registered VASPs therefore will in general only have to make
   specific adaptions and may then passport from Liechtenstein into
   the entire EU and EEA market!




5. MiCAR will regulate the following types of tokens pursuant to
   Art 3 MiCAR:
   

   • Asset-referenced tokens;

   
   

   • Electronic money tokens; and

   
   

   • Utility Tokens.




6. Whereas the following tokens will in general fall outside of
   the scope of MiCAR:
   

   • Unique, non-fungible tokens (e.g., NFTs for art and
     collectibles, etc.);

   
   

   • Security tokens, which qualify as financial instruments under
     MiFID II (Markets in Financial Instruments Directive 2014/65/EU) as
     they fall under the MiFID II and associated regulatory
     regimes;

   
   

   • Automatically generated tokens offered without a peppercorn of
     consideration (i.e., airdrops, etc.).




7. In addition, the following crypto asset services will in
   general be regulated:
   

   • the custody and administration of crypto-assets on behalf of
     third parties;

   
   

   • the operation of a trading platform for crypto-assets

   
   

   • Exchange of crypto assets for fiat currency that is legal
     tender and other tokens as well as vice versa;

   
   

   • the execution of orders for crypto-assets on behalf of third
     parties;

   
   

   • placing of crypto-assets;

   
   

   • the reception and transmission of orders for crypto-assets on
     behalf of third parties; and

   
   

   • providing advice on crypto-assets.

Conclusion:

8. In summary, MiCAR is a new regulation being proposed by the
   European Parliament that aims to create a harmonized framework for
   crypto regulation in the EU and EEA. This regulation will be
   relevant for Liechtenstein once it is implemented into the EEA
   through an EEA Joint Committee Decision (JCD). Currently registered
   VASPs (Virtual Asset Service Providers) with the Liechtenstein
   Financial Market Authority (FMA) will have an 18-month transition
   period to implement changes to the Liechtenstein Blockchain or DLT
   Act (TVTG) and fully comply with MiCAR regulation.




9. The MiCAR regulation will cover various types of tokens such as
   Asset-referenced tokens, Electronic money tokens, and Utility
   Tokens. Certain types of tokens such as Unique, non-fungible tokens
   (NFTs) and Security tokens will fall outside of the scope of MiCAR.
   Security tokens will be treated like financial instruments.




10. Additionally, MiCAR will regulate various crypto asset services
    such as the custody and administration of crypto-assets on behalf
    of third parties, the operation of trading platforms for
    crypto-assets, exchange of crypto assets for fiat currency, and
    providing advice on crypto-assets.




11. Contact us at Law Firm Bergt and Partners Ltd. | Bergt Law if
    you have further questions regarding MiCAR, its implications and
    how it may affect you and your business! You may directly reach out
    to us under

Footnotes

1. Distributed Ledger Technology

2. Gesetz über Token und vertrauenswürdige
Technologie-Dienstleister or Act on Tokens and Trusted Technology
Service Providers (TTTA.)

Originally published by 03 November, 2022

The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.

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