Dublin

The tenth MiCAR Roundtable took place on the 25th of November 2024 at the Trinity Business School. Organized with the support of the European Commission, Crystal Intelligence, Zumo, Blockchain Ireland, Trinity Business School, and thinkBLOCKtank, this roundtable continued the series' mission of fostering legal clarity within MiCAR’s regulatory framework for crypto-assets. This session focused on monitoring and reporting issues specific to CASPs under MiCAR, diving deep into practical challenges and proposed solutions.

The session opened with welcome remarks from Dr. Nina-Luisa Siedler, setting the stage for an engaging agenda. Daniel Taylor, Research & Policy Lead at Zumo, led two discussions: the first on the application and enforcement of CASP sustainability disclosure requirements, addressing the complexities of achieving compliance amidst varying interpretations and operational challenges; and the second on the MiCA sustainability reporting template, exploring ambiguities in current standards and opportunities for improvement in future regulatory iterations. Tiburcio Sanz of Crystal Intelligence contributed a critical analysis of interpretation inconsistencies between the EU’s Transfer of Funds Regulation and FATF recommendations, highlighting jurisdictional divergences and their impact on CASP compliance.

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Application and Enforcement of CASP Sustainability Disclosure Requirements

This topic focused on the challenges of implementing sustainability disclosure requirements under MiCAR. Discussions emphasized the operational difficulties CASPs face in meeting these 'Day 1' obligations, the ambiguity in assessing compliance readiness, and the risk of regulatory inconsistencies across NCAs. The session highlighted the importance of regulatory clarity and harmonized enforcement practices to support the industry in operationalizing these requirements effectively.

Interpretations Inconsistencies Between EU’s and FATF Transfer of Funds Regulation

This topic explored the misalignment between the EU’s TFR and FATF recommendations, focusing on challenges in implementing AML/CTF measures across jurisdictions. Key issues discussed included differing standards for customer due diligence, counterparty verification, and transaction monitoring, as well as the operational risks posed by inconsistent global frameworks. The discussion emphasized the need for standardized practices and greater transparency to address these challenges.

Challenges and Opportunities in the MiCA Sustainability Reporting Template

This topic examined ambiguities in the MiCA sustainability reporting template, including questions about methodology, treatment of multichain assets, and the scope of material disclosures. Discussions also addressed how future iterations of the reporting template could evolve to include more tailored and comparative sustainability metrics, aligning with broader EU sustainability initiatives.

Call to Actions

Regulators should integrate sustainability disclosure readiness checks into CASP application processes and issue clear guidance on assessment criteria.
ESMA should coordinate with NCAs to align enforcement practices and prevent regulatory arbitrage across member states.
Establish EU-wide clarity on sustainability compliance standards, including detailed expectations for disclosures and enforcement outcomes.

Call to Actions

Regulators should issue detailed guidance to align EU TFR implementation with FATF standards, addressing gaps in global Travel Rule compliance.
Develop a transparency framework, such as a "trust seal," to recognize compliant VASPs and encourage best practices across the industry.
Promote cross-border collaboration among CASPs to establish minimum standards for due diligence and data sharing.

Call to Action

Regulators should issue supplementary ESMA guidelines to address ambiguities in the reporting template, informed by industry feedback.
Involve stakeholders in consultations to refine reporting standards, ensuring consistency with broader EU sustainability regulations.
Introduce entity-based disclosures and de minimis reporting thresholds to enhance the practicality and relevance of sustainability reporting.