On 5th of April 2024, the Federal Ministry of Finance (BMF) published two draft regulations intended to effectuate the transition from national crypto regulation to the MiCAR regime, which will finally apply to crypto service providers (CASP) as of 30th of December 2024. Market participants, associations and experts will have the opportunity to submit critical comments on the content of the planned regulations to the Federal Ministry of Finance by 19th of April 2024. With the MiCAR Transit Regulation (MiCAR-TransitV), the Federal Ministry of Finance intends to regulate the use of a simplified procedure for obtaining a MiCAR license as provided for in MiCAR. The draft MiCAR Application Regulation (MiCAR-Antragsverordnung – MiCAR-AntragsV), on the other hand, is intended to define the details of the application process for all application procedures provided for by MiCAR, in particular when which applications for authorization under MiCAR can be submitted by crypto service providers. Both draft regulations find their legal basis in the German Crypto Markets Supervision Act (KMAG), which is also available as a draft version of the Federal Government dated February 7, 2024, but which can be expected to be adopted in the near future in view of the MiCAR, which will already take legal effect as of 30th of June 2024, at least with regard to e-money tokens (EMT) and asset referenced tokens (ART).
MiCAR-TransitV Facilitates Obtaining MiCAR License for Investment Firms and Crypto Custodians
According to MiCAR, the simplified procedure for obtaining a MiCAR license is intended to benefit companies that already are licensed under national law for the provision of crypto services. In Germany, these are in particular crypto custodians that already hold a BaFin license under the German Banking Act (KWG) and crypto service providers with a BaFin license under the German Investment Firms Act (WpIG) or the KWG, for example for investment brokerage or investment advice in relation to crypto assets, operators of multilateral crypto trading systems, proprietary traders or financial commission agents who trade crypto assets for their own account. The MiCAR-TransitV will specify the content requirements for applications in the simplified procedure in the future. In all cases, the applicant will have to state the specific crypto services for which authorization is being applied for under MiCAR. In addition, the applicant must confirm that its business model has remained unchanged since its authorization procedure under national law and that the information on business organization and company management submitted to BaFin at the time is still up to date. Additionally, the applicant must make adjustments to its business organization with regard to the specific compliance requirements of MiCAR and submit them to BaFin. Finally, an updated business plan must be submitted, showing which crypto services are to be provided in which member states in accordance with MiCAR and how the applicant intends to market them.
MiCAR-AntragsV Aims to Regulate Submission Deadlines for All Types of Applications for MiCAR Authorization
The MiCAR-AntragsV merely serves to create the possibility of being able to submit applications for authorization as a CASP to BaFin prior to MiCAR taking full legal effect. This is because as long as the provisions of MiCAR do not yet apply with regard to the application – this will not be the case until 30th of December 2024 – an effective legal basis is required for the application. At the end of 2024, the MiCAR-AntragsV will have served its purpose and will therefore cease to apply. Applications for the simplified procedure to be regulated by the MiCAR-TransitV should be able to be submitted as soon as the MiCAR-AntragsV comes into force, which can be expected by summer 2024 at the latest. The MiCAR-TransitV itself should already regulate the expiry date for the possibility of using the simplified procedure and set it at 31st of August 2025. Initial applications for authorization as a CASP under MiCAR, as well as notification applications from credit institutions or investment firms, should be able to be submitted or transmitted from the date on which the MiCAR-AntragsV comes into force. For market participants in Germany, this means that they should start preparing MiCAR-related applications now in order to be able to submit them immediately after the MiCAR-AntragsV comes into force.
Attorney Lutz Auffenberg, LL.M. (London)
The competent lawyer for the application of a BaFin license according to MiCAR in our law firm is Attorney Lutz Auffenberg, LL.M. (London).
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