The Markets in Crypto Assets Regulation (MiCAR), which will come into legal effect in the European Union in the course of 2024, stipulates that a whitepaper must be prepared when crypto assets are offered to the public or admitted to trading on a trading platform. Depending on the qualification of the crypto asset as a value-referencing or e-money token or other crypto asset, the whitepapers must meet certain requirements. In this series, we want to look at what content needs to be considered and what the differences are between the different categories of tokens. In this first part, we will address the so-called other crypto assets than value-referenced tokens and e-money tokens. MiCAR considers a crypto asset to be a digital representation of value or rights that can be electronically transferred and stored using distributed ledger technology or similar technology. The extent to which the following content is applicable to value-referenced tokens and e-money tokens will be addressed in the subsequent series.
Minimum Requirements for the Content of a MiCAR Whitepaper
The content requirements for a crypto asset whitepaper basically have a lot in common with the content requirements for a securities prospectus. The whitepaper must provide information about the issuer as well as information about other key players in the project. In particular, this information includes key company data (e.g., address, LEI), potential conflicts of interest, and accurate information about the issuer’s financial performance over the past three years. Furthermore, the white paper must contain a detailed description of the project. This information section requires, among other things, information on why the crypto asset is being issued, who is involved in the implementation of the project, and details on the use of funds. Specific information about the public offering of the crypto asset or the admission to trading must also be included. This information includes, for example, details about the issue price, total number of crypto assets or time limits of the offer. In another section of the white paper, the rights and obligations associated with the crypto assets must be presented, as well as information about the technology underlying the crypto assets. As with standard capital markets documents, there must be issuer- and crypto-asset-specific risks in the whitepaper. With the exception of a standard disclaimer that the crypto asset may lose all or part of its value, there must be no statement about the future value of the crypto asset.
Additional Formal and Content Requirements for the MiCAR Whitepaper
There are currently no specific format templates or a limit on the number of pages permitted. ESMA shall develop corresponding technical standards for implementation until 30th of June 2024. However, based on the MICAR, it can already be stated that the first page must contain a clear declaration that the whitepaper has not been approved by any competent authority of a member state and that the provider bears sole responsibility. Following this statement, the governing body of the provider or applicant must certify that the whitepaper meets the requirements of MiCAR. Following this, a summary must be included. This must provide, in concise and non-technical language, material information about the crypto asset’s public offering or intended admission to trading. The whitepaper itself does not have to be approved, but it must be submitted to the competent supervisory authority no later than 20 working days prior to the date of publication. The submission must also include information on why the crypto asset in question is subject to MiCAR. Prior to the launch date of the offer or admission, the whitepaper must be published on the provider’s or applicant’s website and remain available there for as long as crypto assets are held by the public.
Attorney Dr. Konrad Uhink
The lawyer responsible for advising on all questions related to the MiCAR whitepaper for crypto assets in our law firm is Attorney Dr. Konrad Uhink.