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The seventh MiCAR Roundtable took place on the 4th of October 2024 at the University of Liechtenstein. Supported by Bitpanda, Nägele Rechtsanwälte, and the Stabsstelle Finanzplatzinnovation & Digitalisierung, the roundtable was organized in collaboration with Token Summit Liechtenstein, thinkBLOCKtank, and INATBA.

The event featured a keynote by Dr. Clara Guerra, Director of the Office for Financial Market Innovation and Digitisation (SFID), and opening remarks by Prof. Dr. Konstantina Papathanasiou from the University of Liechtenstein. Expert presentations included discussions on own fund requirements under MiCAR, gas fee stations, and outsourcing to non-EU/EEA based service providers.

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Handling Own Fund Requirements under MiCAR

This session outlined the new own fund requirements introduced under MiCAR and the challenges associated with their rigid structure, particularly for larger CASPs. Key issues include the lack of flexibility in calculating fixed overhead requirements and restrictions on using AT1 and Tier 2 instruments.

Call to Actions

Revise the Calculation of Own Funds: Include risk-sensitive factors in the calculation and allow flexibility for CASPs.
Allow Deductions for Non-Regulated Services: Permit CASPs to exclude non-regulated services from the fixed overheads calculation.
Permit Use of AT1 and Tier 2 Instruments: Expand the scope of acceptable capital instruments under MiCAR.
Clarify Monitoring Requirements: Provide standardized guidelines for monitoring own funds.
Exclude Crypto-Assets from Intangible Asset Deductions: Ensure crypto-assets are not classified as intangible assets under MiCAR.

Handling Gas Fee Stations and the Implications of Art. 75 MiCAR

This discussion focused on the segregation of client and own funds for CASPs, particularly on the use of gas stations to pay for network transaction fees. The key challenge lies in maintaining asset segregation while using omnibus wallets for gas fee payments.

Call to Actions

Clarify Regulatory Expectations on Asset Segregation: Issue guidance on how to segregate assets on the distributed ledger.
Permit Flexibility in Gas Fee Handling: Allow CASPs to explore flexible solutions for handling gas fees.
Provide Legal Templates for Compliance: Offer templates for legal agreements that define gas fees as client assets.
Encourage Best Practices for Risk Mitigation: CASPs should adopt strong documentation practices to ensure compliance with MiCAR.

Outsourcing to Non-EU/EEA Based Service Providers

This presentation focused on the challenges posed by Article 73 of MiCAR, which mandates that CASPs remain responsible for regulatory obligations, even when outsourcing. Outsourcing is restricted to entities that meet MiCAR’s requirements, limiting outsourcing to EU/EEA service providers.

Intervention of NCA vs Passporting (Art. 105 vs Art. 65 MiCAR)

The session explored the tension between NCAs and cross-border service provision under MiCAR. It focused on whether host Member States' NCAs have the authority to intervene in CASP operations, despite passporting rules under Art. 65, and how Art. 105 allows product interventions only under specific conditions.

Call to Action

Clarify the Definition of Outsourcing: Provide clear guidelines on key management and control over crypto-assets.
Establish a Safe Harbor Equivalent: Introduce provisions similar to GDPR’s Safe Harbor for third-country outsourcing.
Explore Alternative Approaches: Develop solutions for outsourcing to non-EU/EEA providers while maintaining compliance.
Offer Detailed Examples and Interpretations: Continue offering specific examples and guidance on outsourcing under MiCAR.

Call to Action

Respect Cross-Border Framework: NCAs must respect MiCAR’s passporting framework under Art. 65, allowing CASPs to provide services in host Member States without unnecessary barriers.
Limit Product Interventions: NCAs should only intervene in specific crypto-assets or activities that pose a risk, as outlined in Art. 105.
Establish Whistleblowing Channels: Create safe reporting mechanisms for CASPs facing discriminatory actions by NCAs.
Foster Cooperation Between NCAs: Promote collaboration between NCAs to uphold MiCAR’s intent of cross-border business growth and innovation.