The Markets in Crypto Assets Regulation (MiCAR) will come into full force on December 30, 2024. From this date, the regulations relating to crypto asset whitepapers will also apply. Among other things, these will require providers who publicly offer crypto assets other than asset referenced tokens or e-money tokens to prepare, submit and publish a corresponding crypto asset whitepaper to the competent authority. The same obligations apply to persons who apply for the authorization of such crypto assets for trading. Exceptions to this obligation arise from the MiCAR itself, such as in the case of a public offer to fewer than 150 natural or legal persons or exclusively to qualified investors. An exception to the obligation to prepare a MiCAR whitepaper upon authorization of the crypto asset for trading exists if the crypto asset in question is already authorized for trading within the Union and a corresponding MiCAR whitepaper has been prepared and the person responsible for preparing the whitepaper consents to its use in writing. In this context, the issuers of crypto assets are therefore primarily obliged to prepare a whitepaper. They will regularly have a corresponding interest in both the public offering of the crypto assets and their authorization for trading. But can these obligations also apply to the operator(s) of a trading platform?

Operator of a Trading Platform as a Provider of Crypto Assets in the Context of a Public Offering

In the context of MiCAR, the term provider refers to a natural or legal person or another company that publicly offers crypto assets. Whether the operator of a trading platform can fall under this definition is likely to be a question of the specific case. According to MiCAR, the mere authorization to trade or the publication of bid and ask prices does not qualify as a public offer of crypto assets. In this respect, an operator of a trading platform would only be obliged to prepare a MiCAR whitepaper as a provider if its activities went beyond this. However, not every additional activity should automatically trigger the obligation for the operator to prepare a whitepaper. Rather, the activity of the operator must constitute a public offer itself. This means that the information published about the crypto asset must contain the terms of the offer in order to enable potential investors to decide whether to purchase the crypto asset. It would be desirable if ESMA were to publish corresponding guidelines on when a public offer exists for crypto assets that are already listed.

Operator of a Trading Platform as Initiator for the Authorization of Crypto Assets for Trading

If the operator of a trading platform is the initiator for the authorization of the crypto asset for trading, it is also responsible for ensuring that the corresponding crypto asset whitepaper is published if it has not yet been published in the cases prescribed by MiCAR. Specifically, the legislator is focusing here on the “initiative” of the operator of the trading platform. Generally, the initiative for authorization to trade will probably come from the issuer or, for example, the issuer’s distribution partner. However, if the initiative comes from the operator of the trading platform itself, it should also be subject to the corresponding obligations. Unfortunately, the regulation does not specify when exactly the initiative for the authorization of a crypto asset for trading comes from the operator or another person. In this respect, operators of trading platforms are advised to carry out a precise case-by-case examination. This should apply all the more to operators whose business model includes the tokenization of financial products and their distribution in addition to operating a trading platform. Depending on the field of activity, the threshold for becoming an initiator could be exceeded relatively quickly.

Attorney Dr. Konrad Uhink

I.  https://fin-law.de

E. info@fin-law.de

The lawyer responsible for providing advice on MiCAR whitepaper creation in our law firm is attorney Dr. Konrad Uhink.