In May 2023, the European Union enacted the Markets in Crypto-Assets (MiCA) legislation, bringing forth comprehensive regulations for crypto businesses operating within the EU. To assist crypto companies in achieving compliance with MiCA, nine members of the Cointelegraph Innovation Circle share their valuable insights. Here are the key steps they recommend:
1. Embrace the transition
Leaders should view MiCA as an opportunity for clarity and legal definitions, fostering equilibrium among all participants in the crypto space.
2. Proactively address compliance
Establish a robust compliance program by staying updated on regulatory changes, implementing internal policies, providing staff training, and maintaining transparent communication with regulators.
3. Engage with relevant regulators
Determine if your business falls under MiCA’s scope and engage with EU regulators to develop an implementation and compliance plan through collaboration rather than confrontation.
4. Review existing white papers
Ensure that existing white papers accurately reflect project details and any necessary changes, as they play a crucial role in meeting MiCA requirements. Companies without white papers should prioritize creating them.
5. Seek legal advice for an action plan
Consult legal experts to create a tailor-made, step-by-step action plan for complying with MiCA before it takes effect, enhancing credibility, investment, and long-term growth prospects.
6. Prioritize transparency
By prioritizing transparency, companies fulfill their responsibilities under MiCA while establishing credibility with investors and regulators, leading to a more stable regulatory landscape for crypto assets in the EU.
7. Explore sustainable mining practices
Address environmental impact and pursue sustainable mining practices to align with MiCA’s stability, transparency, risk management, and asset protection objectives. Understanding related regulations is crucial.
8. Consider non-EU jurisdiction operations
Assess how MiCA compliance may impact operations in jurisdictions outside the EU, considering potential contradictions with differing regulations, such as proof-of-work and proof-of-stake discrepancies.
9. Ensure airtight KYC practices
Prioritize robust Know Your Customer (KYC) processes to be fully compliant with MiCA before its implementation. Effective KYC can promote mainstream adoption by reducing criminal activities like money laundering.
Crypto companies operating in the EU must act now to ensure they meet MiCA requirements and understand the implications for their global operations. Compliance with MiCA will foster a stronger and more vibrant crypto industry within the EU, setting the stage for increased credibility, investment, and growth in the long run.
Note: This article was published through Cointelegraph Innovation Circle, an esteemed organization of senior executives and blockchain technology experts. The opinions expressed in the article do not necessarily reflect those of Cointelegraph.