MiCA Ready

If you are looking to get authorised under #MiCAR in Ireland, the Central Bank of Ireland has confirmed (or perhaps reconfirmed in some people's minds) that it intends to open its MiCAR authorisation gateway in early QUARTER 3 2024. This will coincide with the CBI hosting an industry event in July where it will set out its authorisation and supervisory expectations in detail. While VASPs operating under the VASP regime prior to 30 December 2024, under MiCAR, will be permitted, post 30 December 2024, to avail of a transitional period enabling them to continue to operate for up to 12 months or until their CASP authorisation is granted or refused, whichever is sooner the CBI says that in respect of firms not yet registered as VASPs its experience is that period of at least ten months is required to conclude the assessment of a VASP application. The CBI says such firms should focus their efforts on preparing for a CASP application (under MiCAR) rather than seeking a VASP registration at this time. For those VASPs that have already applied for a registration but have not reached the end point of the process, the CBI will continue to assess these applications and will engage bilaterally with these firms on the progress of their applications. Following Ramp Swaps (Ireland) Limited's registration as a VASP, the latest such registration in Ireland, there are now 13 registered #virtualasset service providers in Ireland and potentially a few more to come. Get in touch with CompliReg and MiCA Ready if you are looking to get a Markets in Crypto Asset Regulation authorisation in Ireland or elsewhere in Europe. Firms looking to get authorised in Ireland as a CASP or registered in near future as a VASP should note the following extracts from a speech today by Gerry Cross at Blockchain Ireland's excellent event this week: * authorisation is a two way process. A successful process depends crucially on the preparation and approach of the applicant. * key aspects of a successful application, include: (1) TRANSPARENCY: (a) firms should act in a fully transparent and open manner with respect to their proposed application; (b) if an applicant is applying in multiple EU jurisdictions for a MiCAR activity the CBI says the firm must disclose this in its application; (2) PREPARATION: (a) firms should prepare well and be appropriately resourced to engage with the CBI 'in a comprehensive and timely manner throughout the assessment process'; (b) preparation also means that firms understand the local regulatory environment. (3) SUPERVISIBILITY: authorised firms should operate with strong local autonomy and be accountable for all aspects of the local entity. Where we identify obstacles to firm’s meeting this expectation, they will not be authorised. (4) CONSUMER FOCUS: firms should ensure that securing customer interests is at the core of their business. This is particularly the case for retail facing business models. Read more at https://lnkd.in/eMCcpdEb

In the week where there is speculation that the US SEC will decide upon approving (or not) #BTC #ETF applications, comes data powered by Irish #fintech / #regtech Fenergo, that #crypto and fintech groups were for the first time fined more for lax controls than the entire traditional financial system last year, as global authorities cracked down on illicit money flows in finance’s new frontiers. The Financial Times reports that crypto and #digitalpayments companies paid $5.8bn in fines last year for shortcomings in customer checks and anti-#moneylaundering controls, as well as for failing to uphold sanctions and other financial crime issues. The $5.8bn total is skewered by the $4.3bn penalty against crypto exchange Binance billed as a warning shot by US prosecutors. This figure dwarfed the $835mn paid by traditional financial services groups last year, the lowest level in a decade. Fenergo also said that total fines for money laundering and other financial crime violations rose more than 30% to $6.6bn, but remained well below the 2015 peak of $11.3bn. Rory Doyle, head of financial crime policy at Fenergo, said fines against traditional financial institutions could rise again “as suspicious patterns begin to emerge” from dealings with Russian entities. Interestingly Charles Kerrigan, a crypto specialist and partner at law firm CMS, said fines would likely fall in the coming years because crypto was already much more tightly controlled than it was in its infancy. “It’s got to a point now where law enforcement are openly saying they wish people would use crypto to commit crimes but you’d have to be mad to do that,”. Kerrigan also said that crypto was not big enough to fuel significant levels of #financial crime or to be a significant source of financial crime fines in the longer term. Its global market cap is just $1.8tn, compared with the hundreds of trillions of assets in the traditional financial system. This is a good article to add to your typologies as you get MiCA Ready. Other informed comments in FT link below by Dennis Kelleher Andrew Barber David Lewis https://lnkd.in/eVv5ajcY Fintech Ireland RegTech Ireland

The announcement in the media that Coinbase is selecting Ireland as its EU regulatory headquarters has sparked quite a lot of discussion in #crypto regulatory circles. Myself & a few others have been thinking about similarities between the race for a MiCAR authorisation [either from a standing start or from the position of already being a #VirtualAsset Services Provider registrant in the EU] & the race for UK regulated firms needing an EU home post #Brexit. In particular, I recall certain member states doing road shows on why a UK regulated firm should choose their countries. While in Ireland, when challenged by the representative bodies & gatekeepers about doing more, the Central Bank of Ireland responded in speeches that it was in no one's interest to get involved in a race to the bottom. Will we not see something similar when it comes to #MiCAR? Just because Company A has a VASP registration in EU country A it could make sense but it doesn't necessarily follow that it will pursue a MiCAR authorisation in EU country A. That is more so the case, arguably, when they have VASP registrations in EU countries B, C & others (because there is no passporting). Therefore, and I am already seeing it myself, there are EU countries laying out their stall for your MiCAR authorisation regardless if you are (or not) already registered there as VASP. Some EU countries argue that their current VASP registration (& remember it was only ever intended to be a mere registration) is so robust and already aligned to MiCAR that you will find its offering a fast, efficient & effective way to getting the authorisation crown. I suspect other member states might take a political or supervisor risk-based decision not to exceed their obligations when dealing with a MiCAR authorisation and - potentially adding things into the authorisation process - to unintentionally but effectively killing-off an application. And, while it is great to hear of a large #digitalasset player laying down the marker that Ireland will be its EU regulatory home, I have lost count of how may #MiFID, #emoney and #payment firms that have told me that "Ireland is the only country for our company", only to find that their view changes during the course of the authorisation process for whatever reason. I've seen companies apply elsewhere while pursuing an application in Ireland & I have spoken to some of those companies 18 months latter when they discovered the grass wasn't greener in the other EU member state. Against that backdrop, very interesting to read the Chair (Verna Ross) of European Securities and Markets Authority (ESMA) letter of 17 October 2023 to Nadia Calviño President of the Economic and Financial Affairs (ECOFIN) Council of the European Union, saying a number of important things about the MiCAR authorisation infrastructure. See link in comments. Sorry, at full word count. Can't fit in the key points made by ESMA about its very real & relevant concerns. Charlie Taylor