The Markets in Crypto Assets Regulation (MiCAR) will also regulate crypto service providers offering the placement of crypto assets from December 30, 2024. In addition to the general licensing requirements MiCAR imposes on any crypto service provider, crypto service providers that wish to offer the placement of crypto assets will additionally have to meet specific obligations tailored to their specific crypto service in order to be eligible for a MiCAR license. In any case, they will have to maintain the minimum regulatory capital of EUR 50,000 and have professionally qualified and reliable business managers and a professional business organization. In addition, crypto service providers wishing to offer the placement of crypto assets will have to comply with detailed information obligations towards their clients and implement specific and adequate procedures to identify, avoid, regulate and disclose any conflict of interest that may be associated with their activity. But what specific activity is actually regulated via the crypto service of placing crypto assets and when is the obligation to apply for a MiCAR license triggered in this regard?

Placement of Crypto Assets Under MiCAR is Special Case of Crypto Brokerage

MiCAR defines crypto asset placement as the marketing of crypto assets to purchasers on behalf of or for the account of the provider or a person associated with the provider. The definition makes it clear that crypto asset placement under MiCAR is a marketing activity in which the crypto asset service provider is is active on the side of the provider of the crypto assets in question. However, it is not clear from the definition whether the activity must necessarily be a brokerage activity or whether the placement of crypto securities can also be assumed in the case of a sale of crypto securities from the crypto service provider’s own stock, as long as the sale is ultimately made for the account of the provider. However, since the sale of crypto assets from the crypto service provider’s own holdings would already fall under the more specific crypto service of exchanging crypto assets for money or other crypto assets and the provider would no longer have an economic interest in the further sale, there is good reason to assume that the placement of crypto assets under MiCAR is a special case of crypto brokerage. It can be assumed from the special provisions of MiCAR on the placement business with crypto assets, that a placement agreement must be concluded between the crypto service provider and the offeror in any case, in which the details for the placement of the crypto assets are regulated. According to MiCAR, it is also possible for the placement service provider to agree on a fixed takeover obligation with respect to the crypto assets vis-à-vis the provider in the event that the placement of the crypto assets is not as successful as planned.

Special Obligations of Crypto Asset Service Providers for the Placement of Crypto Assets

MiCAR requires that crypto asset placement service providers enter into a placement agreement with the providers of the crypto assets to be placed. Prior to conclusion, i.e. at the latest in the placement agreement, crypto asset service providers must disclose to the providers the manner in which the placement is to be carried out and whether, or in what amount, they guarantee minimum sales. The amount of transaction fees associated with the proposed placement must also be disclosed, and in this respect both crypto and cash transaction fees are likely to be relevant. In addition, prior to entering into the placement agreement, crypto asset service providers offering placement services must disclose the target group of buyers they will be approaching and what they plan in terms of the placement period, the process and the expected price of the placement service. Furthermore, crypto asset service providers offering the placement of crypto securities must design their internal procedures in such a way that, in particular, conflicts of interest in connection with a simultaneous proprietary distribution by the provider, incorrect planning with regard to the placement price or monetary or non-monetary incentives of the provider for the crypto asset service provider can be identified and avoided.

Attorney Lutz Auffenberg, LL.M. (London)

I.  https://fin-law.de

E. info@fin-law.de

The lawyer responsible for advising on obtaining a MiCAR license for the placement of crypto securities in our law firm is Attorney Lutz Auffenberg, LL.M. (London).