Madrid

The eighth MiCAR Roundtable took place on the 10th of October 2024 at the historic Palacio de Cibeles in Madrid. Organized with the support of the European Commission, Crystal Intelligence, Merge Madrid, and Taxbit, this roundtable continued the series' mission of fostering legal clarity around MiCAR’s regulatory framework for crypto-assets.

The session opened with welcome remarks from Tiburcio Sanz of Crystal Intelligence, followed by an engaging agenda that featured expert presentations. Tommaso Astazi from Blockchain For Europe examined the integration of the Transfer of Funds Regulation with MiCAR, addressing critical challenges in harmonizing AML obligations across the crypto space. Dr. Max Bernt from Taxbit highlighted privacy and data protection concerns related to DAC8, CARF, and other regulatory frameworks, while Albi Rodriguez Jaramillo of Garrigues discussed systemic risk management and compliance for E-Money Tokens.

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Expanding the Regulatory Landscape: TFR and Its Integration with MiCAR

This topic focused on the complexities of integrating the Transfer of Funds Regulation with MiCAR, particularly regarding the extension of the Travel Rule to the crypto sector. The discussion highlighted how CASPs are now required to exchange originator and beneficiary information for each transaction. While this regulation enhances transparency, it presents challenges, particularly with self-hosted wallets (SHWs) and balancing compliance with user privacy.

Call to Actions

Reinforce the Risk-Based Approach: Regulators should enable CASPs to assess and mitigate risks based on individual transactions and customer profiles rather than applying blanket verification requirements.
Support Technological Solutions: Frameworks should encourage the use of innovative tools (e.g., decentralized identity solutions) that align with compliance while respecting user privacy.
Clarify SHW Verification Thresholds and Standards: Regulators should provide clear guidance on thresholds for due diligence with SHWs to ensure consistent application across the EU.
Avoid Stricter Rules than TradFi: Treat crypto-transfers proportionately, ensuring scrutiny aligns with the inherent transparency of blockchain transactions.

E-Money Tokens and Systemic Risk: Ensuring Compliance and Financial Resilience under MiCAR

Call to Actions

This session examined EMTs under MiCAR, focusing on systemic risk and the compliance obligations for financial resilience. The discussion covered stability, capital reserves, and reporting requirements for EMTs, especially for "Significant" EMTs, which are subject to increased capital and liquidity standards and dual supervision by NCAs and the EBA.

Enhance Reporting Consistency through SupTech Tools: Adopt supervisory technology solutions (e.g., BIS Pyxtrial) to centralize and harmonize real-time EMT reporting for improved regulatory oversight.
Standardize Regulatory Training Across the EU: Develop a unified EU-wide training program to enhance regulatory oversight capabilities for EMTs, with support from EU funding.
Clarify Compliance Standards for EMT Reporting: Provide clear guidelines for EMT issuers, particularly for Significant EMTs, to prevent redundant reporting and streamline compliance.
Promote CASP Collaboration in Data Sharing: Encourage CASPs to work closely with regulators to ensure timely, relevant data sharing that supports MiCAR’s risk and liquidity standards.

Addressing Privacy and Data Protection Challenges within MiCAR, AML, DAC8, and CARF Frameworks

Call to Action

This topic addressed privacy and data protection concerns arising from the intersecting obligations under MiCAR, AMLD6, TFR, DAC8, and CARF. Key issues discussed included the handling of combined on- and off-chain data, non-secure investigative tools, and cross-border data-sharing complexities, all of which increase risks related to privacy breaches and regulatory compliance.

Mandate Secure Reporting Tools: Regulatory bodies should require the use of certified, secure platforms for handling sensitive off-chain data, with encryption and access control.
Develop Data Handling Protocols: Establish guidelines to ensure secure management of on- and off-chain data, with protective measures for integration.
Clarify Cross-border Data Privacy Standards: Introduce clear, robust standards for cross-border data exchanges under DAC8 and CARF to ensure secure handling.
Adopt Privacy-Enhanced Transparency: Regulate data collection to focus strictly on essential information, using anonymization techniques where feasible to balance regulatory oversight and user privacy.