BCAS

🌐 Decentralisation under Mica ⚖ The notable rise and growth of DeFi has presented as many opportunities as it has challenges. A cohesive definition of DeFi remains, to this date, elusive, with knock-on effects such as being unable to draw the exact line where DeFi, in its various guises, stops being unregulated and becomes regulated. Such, indeed, is a debate that arises within the context of MiCA. In response, the Technical and Legal departments at BCAS, led by Jonathan Galea, have been dedicated to an in-depth analysis of the extent to which DeFi is captured under MiCA, giving due attention to the underpinning word of the term itself: decentralisation. Drawing from our extensive experience working with leading DeFi projects, we have developed a comprehensive handbook for any DeFi project seeking clarity on how it will be impacted by MiCA. Titled 'Decentralisation under MiCA: The Definitive Handbook for DeFi', this extensive treatise analyses decentralisation from five distinct angles to determine which regulatory considerations under MiCA apply to DeFi projects. We also outline the relevant criteria that might lead a DeFi platform or protocol to be considered within MiCA's scope and suggest measures to avoid falling within its regulatory reach. Read the full Decentralisation Handbook or download the PDF version here: https://lnkd.in/eWQnsb_B

As most of you know by now, I'm somewhat of a fan of Latin terms, so do allow me to unveil what is, without any exaggeration, our 'magnum opus' - a treatise on the concept of decentralisation, and the extent of its applicability under MiCA. While this is a culmination of weeks of work by the team at BCAS, the knowledge depth behind it spans years, as we truly sought to open-source the observations, discussions, and arguments we have tailored while working hand-in-hand with some of the best known names in DeFi. 67 pages, over 22,000 words, but with firm, clear conclusions, as we want to give DeFi its best shot at growing further without intended or unintended regulatory implications. We explore decentralisation from five distinct aspects, laying out best practices and thresholds in each area. In the second part of the handbook, we focus fully on MiCA, dissecting the definition of a CASP to bare atoms, and engaging in a thesis on how the overarching concept of decentralisation impacts matters such as the offering of crypto-asset services, running an online interface, and publicly offering crypto-assets. What makes us proud, most of all, of this handbook, is that this is our best effort to date to open a window into our daily work, which we do with passion and love for the industry. But before I err on the side of soppiness - I'll stop here, and invite you all to join us on this journey. https://lnkd.in/dt83J9mv

📈 MEV and MiCA's Article 92 📜 MEV activities have had a considerable impact on the crypto ecosystem, prompting a complete reshaping of how transactions are processed on most major blockchains. The eminence of MEV activities has captured the attention of regulators around the world, and the EU has been no exception. In its third consultation package, ESMA has triggered the question of whether miners and validators, in the context of MEV, should be considered as PPAETs and therefore obliged to comply with the requirements of #MiCA's article 92. In our latest article, co-authored by Jonathan Galea and Martín Azpiroz, we provide a detailed exploration of the MEV world, highlighting the current landscapes in Ethereum and Solana, detailing the role of each of the actors involved in MEV, and reviewing the most relevant MEV-related activities. This technical introduction to the topic allows us to substantiate our response to ESMA's question, which is introduced in the last section of this piece. Find out how we argued that miners and validators are not to be considered PPAETs and, consequently, are not obliged to comply with MiCA's article 92: https://lnkd.in/d6PYc7ye

🌍 The Environmental Impact of Crypto under MiCA 🌍 As the crypto industry evolves, its environmental footprint is under increasing scrutiny. Our latest article explores why "energy" is becoming a contentious issue within the EU's #MiCA framework. From the challenges of energy disclosure to the complexities of sustainability in Proof of Work vs. Proof of Stake, this opinion piece delves into the critical intersection of crypto and environmental responsibility. Read more: https://lnkd.in/dRf-AjS3

🔍 Exploring Interest-Bearing Stablecoins under MiCA 🔍 Stablecoins have revolutionized the crypto world, but their lack of interest accrual poses a challenge. Our in-depth article dives into the technical designs of interest-bearing stablecoins and their legal implications under the EU's #MiCA regulation. From the innovative mechanics of rebasing tokens to the complexities of price appreciation models, this piece provides a comprehensive look at how these stablecoins can address market inefficiencies while navigating the regulatory landscape. Read more: https://lnkd.in/dHAs5fUx

Market Abuse Prevention Under MiCA 🛡️ Our recent article breaks down the Market Abuse Prevention measures outlined in MiCA's Title VI. We explore how these regulations aim to enhance transparency and integrity in the crypto markets, ensuring a fairer environment for all participants. Dive into the details here: https://lnkd.in/dTz-A9qa

🔗 Deep Dive into DAO Governance with Uniswap 📊 In this analysis, we explore the intricacies of DAO governance, focusing on the impact of voting costs on participation. The Uniswap case study sheds light on how gas fees affect the behaviour of different token holders, offering valuable insights into the challenges and opportunities within decentralized governance. Catch the full analysis here: https://lnkd.in/dkCm9twA

We recently delved into the rapidly evolving world of Real-World Assets (RWAs) tokenisation. As this trend bridges the gap between DeFi and TradFi, it’s reshaping investment opportunities by making traditionally illiquid assets more accessible and liquid. From stablecoins to U.S. Treasuries and private credit, the potential of RWAs is immense, with a projected market value of $16 trillion by 2030. Read more on how RWAs are transforming finance: https://lnkd.in/dwqg-5w2

Something I've been saying for two years is now confirmed by ESMA in their latest MiCA Q&A update - a VASP registration under the 5AMLD does *not* count as a licence, and will be useless to seamlessly switch to a MiCA licence. Only Malta & (limitedly) France can use the simplified MiCA licensing process. Why limitedly for France? Because they only have SocGen licensed under the regime that is deemed to be MiCA-equivalent - all their DASP/5AMLD registrations are still not eligible for the simplified licensing process. Confident in predicting that come January 2025, only a small fraction of all the EU-based exchanges and other service providers will be anywhere near attaining their MiCA licence.

Last Friday, the European Banking Authority (EBA) issued a set of guidelines setting the priorities for supervisors vis-a-vis Titles III (ARTs) and IV (EMTs). Rather than hearing it as a repeated mantra from yours truly, there is an express confirmation from the EBA that MiCA regulates the offering to the public and seeking admission to trading of EMTs and ARTs - it does not regulate the mere issuance thereof. Since *only* issuers of EMTs and ARTs can offer to the public or seek their admission to trading i.e. approach a trading platform asking for listing, it stands to reason that the legislator uses the term 'issuer' throughout Titles III and IV - but without ever setting aside the fact that an issuer only requires authorisation if they are seeking to offer an EMT/ART to the public, or seek their admission to trading, in the Union. I hope this settles the debate once and for all (although admittedly the chances of such are slim, as long as there are people who do not take the time to actually read the text of the law itself). Link to the document in the comments below.