MiCA is here. The implementation of the Crypto-Asset Markets Regulation marks a turning point in the regulation of the sector in Europe. For the first time, the regulatory framework aims to bring order to a market that, until now, seemed as difficult to control as trying to hold a bag of water. However, regulating something as innovative and complex as crypto-assets is no easy task, and MiCA, although it is a pioneering law, inevitably leaves some areas that need clarification.
It is in this context that the ESMA guidelines emerge, designed to complete and clarify those grey areas that MiCA, by its very nature, cannot cover in detail. These guidelines not only help crypto-asset service providers (CASPs) better understand their obligations but also strengthen investor protection in a market that combines high levels of technology, volatility, and creativity. Essentially, they are the necessary complement for MiCA to function as the solid framework we all expect, guiding both companies and investors towards a safer and more transparent ecosystem.
One of the key aspects of these guidelines is the suitability assessment, A crucial process in services like crypto-asset advisory and portfolio management. In this context, CASPs must carefully assess the client’s profile to ensure that investment recommendations or decisions align with their knowledge, financial goals, and risk tolerance. For example, a client with little experience and a low risk tolerance should not receive suggestions to invest in volatile or speculative tokens. In the case of portfolio management, CASPs must prioritize investments that reflect the client’s objectives, such as financial stability, and adjust strategies based on their ability to bear losses.
This analysis cannot be superficial. CASPs must gather and process key information, such as the client’s level of knowledge and experience, specific financial goals, risk tolerance, and financial capacity. Tools like structured questionnaires and digital systems not only allow for documenting this information but also enable its analysis to make informed decisions, and most importantly, decisions that are suitable for each profile.
But this is not enough. The client’s trust must be reinforced with additional measures such as periodic statements., which reinforce transparency and allow the investor to understand in detail the status of their portfolio. These statements, which are typically issued quarterly, include key information: portfolio performance, associated costs, and how the decisions made align with the client’s initial objectives. Additionally, ESMA emphasizes that these reports must be written in clear and accessible language, avoiding technical terms that may cause confusion. Clarity in communication is essential for all investors, regardless of their experience, to understand the impact of the decisions made in the management of their assets.
On the other hand, crypto-asset transfers represent a particularly sensitive area. This process, which involves moving digital assets from one wallet to another, is marked by its irreversibility and the absence of traditional intermediaries, which increases risks for the client. In light of this reality, ESMA has established clear guidelines to ensure that these operations are carried out securely and transparently. For example, CASPs must provide detailed pre-contractual information, such as total costs, irreversibility risks, and service conditions. Additionally, it is essential to have clear procedures in place to handle problematic transfers, such as rejections or refunds, and to define the provider’s responsibilities in the event of errors or technical failures.
These elements are just part of the framework designed by ESMA. The guidelines also emphasize the importance of continuous training for CASP staff, ensuring they are prepared to assess client profiles, handle transfers, and act with professionalism and ethics. Additionally, the implementation of automated systems that support the issuance of clear and accessible reports, as well as the management of risks in transfers, is not only a matter of regulatory compliance but also an opportunity to strengthen client trust.
With all of this, it is clear that ESMA has taken a crucial step to protect investors and promote a safer and more transparent market. For CASPs, this means adapting to increasingly stringent requirements but also adopting a proactive, client-focused approach that allows them to stand out in a constantly evolving environment. At Cysae, we support our clients in this process, helping them comply with MiCA effectively and efficiently while strengthening their position in the market.
In short, regulation not only establishes rules but also opens up opportunities for CASPs to build strong, trust-based relationships with their clients, thus consolidating a more stable and reliable crypto ecosystem for all.
