The new European Markets in Crypto-Assets Regulation (MiCA) bill, which will come into full force on January 1, 2025, includes measures to protect crypto investors. However, crypto service providers will have an 18-month period to adapt, so MiCA won’t be in a position to provide real protection for investors until July 2026 at the earliest.
The European Securities and Markets Authority (ESMA) has published a document clarifying the MiCA’s effective dates. The regulator also urged crypto companies to prepare for the transition and investors to be cautious, as the new bill won’t protect their interests for another three years.
In the document, the regulator emphasizes that MiCA is still in the process of preparation, and the bill is expected to be fully implemented by the end of December 2024. This, in turn, means that crypto investors won’t be able to exercise their rights under the envisioned protections until that time.
The document also states that once MiCA is fully implemented, EU member states have the right to grant crypto-asset service providers an additional 18-month period during which they can operate without a license. The same means that the MiCA safeguards envisioned for cryptocurrency holders and clients of crypto-asset service providers may not apply until July 2026.
ESMA representatives also stress that MiCA doesn’t address all the risks associated with digital assets since many cryptocurrencies are purely speculative in nature. Therefore, even after MiCA is implemented, retail investors should realize that there’s no such thing as a “safe” crypto-asset.
Additionally, the regulator reminded that during the transition period, most supervisory authorities will have limited powers to monitor those companies that take advantage of the one-and-a-half year grace period. Depending on local laws, the regulators’ powers will be limited to the current AML and CTF rules.
The European Parliament formally adopted MiCA in April this year, but the regulatory restrictions and rules spelled out in the bill will come into effect gradually. CoinsPaid is organizing an exclusive conference in Tallinn with experts and representatives of European regulators to discuss the upcoming changes associated with MiCA coming into force.
