Ben Parker, founder and CEO, eflow Global
In July, CoinShares, the digital asset investment company, became the first European firm to receive Markets in Crypto-Assets Regulation (MiCA) authorisation. The firm now holds all three key legal licenses – MiCA, MiFID and AIFM – which it says will create “new investment possibilities across [the] €33trn European asset management market”. But is it a sign of a new era?
What this does demonstrate is the variety of regulations and licenses compliance teams need to be on top of, and the different interpretations and enforcement strategies deployed by various international regulators.
When it comes to MiCA, there are different theories from different regulatory and national bodies. But the general perception is that Title VI of the regulation (encompassing trade surveillance and market abuse) isn’t something that can be grandfathered as it applies equally to individuals as well as crypto-asset service providers (CASPs); and a person cannot be grandfathered, only a firm can be.
As a result, in reality, Title VI has been in full effect since 30 December 2024, meaning firms/CASPs are formally subject to these requirements. However, uncertainty remains around enforcement priorities and how rigorously regulators will pursue violations in practice.
So, what do CASPs need from policymakers to best adhere to MiCA regulations?
- Certainty on enforcement timelines
Firms cannot plan effectively without a common understanding of when compliance obligations ‘bite’. This is especially true with Title VI, where different jurisdictions are taking different views. Even though MiCA is now in force, transitional arrangements under Article 143 have allowed member states to use different grandfathering lengths. Some countries have used the maximum 18-month window, while others have chosen shorter periods – but every state has opted for a period of some sort.
For firms operating cross-borders, this medley of dates makes it tricky to form a uniform compliance calendar without mapping each jurisdiction themselves. But while a firm can benefit from grandfathering, an individual can’t. In principle, then, every CASP is already on the hook. So, firms that have assumed transitional cover here may find themselves exposed if regulators do choose to pursue enforcement.
Such uncertainty undermines strategic planning. Do firms allocate budget to data pipelines now, or hold off until supervisory priorities are clearer? If enforcement will be less stringent in certain territories, can they stagger resources and budget for these areas? Policymakers like the European Securities and Markets Authority (ESMA) could help resolve some of these issues by publishing a consolidated supervisory calendar of when key obligations take effect and when regulators expect full compliance.
- Consistency across borders
It’s not just timelines that are causing uncertainty. National regulators may interpret MiCA differently, creating uncertainty for firms that operate across multiple markets. Indeed, three National Crime Agencies (NCAs) – France’s AMF, Austria’s FMA and Italy’s CONSOB – have explicitly called for stronger EU-level supervisory coordination after observing early disparities. That’s a signal that cross-border inconsistency is front of mind for regulators too. As such, greater cross-border alignment would reduce unnecessary friction.
For CASPs, this disparity can create operational hazards. Trade surveillance thresholds, reporting formats, required retention periods, and so on, can all vary between regions, forcing firms to run parallel processes (unless pan-EU clarity is established).
In this respect, it would be incredibly beneficial if ESMA looked to harmonise supervisory templates and shared reporting formats (especially for core areas like trade surveillance and market abuse reporting). They could also provide more robust guidelines on what enforcement steps will be harmonised amongst NCAs and which will be left to national discretion.
For example, a centralised Q&A sandbox run by ESMA and various NCAs could let firms test approaches and be publicly informed of regulator positions, helping to establish cross-border consistency. Without such clarity, MiCA’s attempts at unifying crypto-asset surveillance will remain inconsistent.
- Guidance on practical implementation
Even if timelines and regional scope are clear, firms still need compliance clarity. Essentially, what does ‘good’ look like in practice? This is crucial for avoiding a patchwork of approaches and potential enforcement surprises, especially around trade event coverage – a key part of Title VI, where firms need to monitor, detect and deter market abuse.
Surveillance in digital assets is technically complex. The ability to reconcile on-chain and off-chain and cross-market data, for example, is a unique challenge. Without common standards and compliance tools, outcomes may differ considerably. ESMA’s guidelines provide principles, but they stop short of prescribing how firms should design detection rules, set thresholds, or triage alerts.
Here, policymakers can make a real difference. Templates for event logging, a set of example surveillance/detection rules, and benchmarks for key performance indicators – such as mean investigation time or acceptable alert backlogs – would give CASPs a clearer target and allow them and NCAs to maintain mutual expectations. Guidance on how to attribute on-chain activity to legal entities would also reduce disputes during supervision.
Establishing clarity and consistency
MiCA is a landmark achievement for crypto-asset regulation, but its success depends on execution. Firms should be prepared or preparing for full compliance now. Yet policymakers must meet them halfway – and three priorities stand out.
First, policymakers could publish a clear supervisory calendar to remove ambiguity around enforcement timelines. Second, they could drive greater alignment across national regulators and NCAs, reducing the incentives for regulatory arbitrage. Third, they could provide practical templates that help firms know what ‘good’ looks like in surveillance and reporting.
The alternative is a fragmented, uneven landscape where compliance becomes a guessing game. That would leave both firms and regulators worse off — and would squander the opportunity MiCA represents.
