With the Markets in Crypto-Assets Regulation (EU) 2023/1114 (“MiCAR”), the regulation of crypto-asset markets has entered a new phase. From the start of 2025, public offers of crypto-assets and their admission to trading will generally be subject to an obligation to prepare and publish a crypto-asset white paper. This is a regulatory information document that must be prepared and published by the issuer or offeror. MiCAR thus establishes, for the first time, a uniform regulatory framework for transparency and disclosure requirements in the crypto market within the European Economic Area (“EEA”).
Legal framework and implementation in Liechtenstein
MiCAR is directly applicable in Liechtenstein. Supplementary provisions are set out in the EEA MiCA Implementation Act (“EEA MiCA-DG”), which transposes the European requirements into national law. In addition, the supervisory provisions of the Token and VT Service Providers Act (“TVTG”) remain relevant for those tokens and services that do not fall within the scope of MiCAR. Compliance with the regulatory requirements is monitored by the Liechtenstein Financial Market Authority (“FMA”).
Practical tips
In Liechtenstein, the first practical question is not whether a white paper needs to be drawn up, but whether the token falls within the scope of MiCAR at all. Depending on its structure, the TVTG, prospectus law or other financial market regulations may still apply. A clear token classification at the start of the project is therefore crucial, as it determines whether MiCAR obligations, TVTG obligations or other regulatory requirements apply.
What is a crypto-asset within the meaning of MiCAR?
A crypto-asset within the meaning of MiCAR is a digital representation of a value or a right that can be electronically transferred and stored using distributed ledger technology (“DLT”) or comparable technology. However, only crypto-assets that are not already regulated by other financial market legislation fall within the scope of MiCAR. For transferable securities (e.g. shares, bonds or similar securities), a capital markets prospectus must therefore still be drawn up in accordance with the Prospectus Regulation.
MiCAR distinguishes between three categories of crypto-assets:
Asset-referenced tokens (“Asset-Referenced Tokens” or “ART”): Crypto-assets whose value is intended to be stabilised by reference to one or more assets, rights or combinations thereof. This may also include several official currencies.
E-money tokens (“EMT”): Crypto-assets designed to stabilise their value by reference to a single official currency. They function similarly to e-money and can be used in particular for payment purposes.
Other crypto-assets: All other crypto-assets that cannot be classified as either e-money tokens or asset-referenced tokens. These include, in particular, utility tokens as well as a wide variety of other token types.
Practical information
A common question in practice concerns the distinction from financial instruments. If a token qualifies as a share, bond, fund unit, transferable security or other financial instrument, it generally does not fall under MiCAR but under the relevant financial market regulations. Where there are genuine difficulties in distinguishing between categories, it may be advisable to submit a classification request to the FMA in Liechtenstein, for example if it is unclear whether a token should be classified as an ART, a financial instrument or another type of crypto-asset. A fully detailed description of the facts, together with a legal assessment – for example in the form of a legal opinion or a reasoned self-assessment – must be submitted to the FMA. The FMA assesses the request on the basis of the information submitted.
When is a white paper required under MiCAR?
A white paper is required if crypto-assets are to be publicly offered or admitted to trading on a trading platform within the EEA. In this case, providers or applicants must prepare a white paper, submit it to the competent authority and publish it. The specific requirements depend on the respective token category.
What must a white paper contain?
The white paper must contain complete, clear and non-misleading information. The mandatory information is set out in Annexes I to III of MiCAR for the respective token category. For Title II tokens (Annex I), the minimum requirements include:
– Information on the provider or authorisation applicant, the issuer and, where applicable, the operator of the trading platform;
– Description of the project and the crypto-asset;
– Rights and obligations of the crypto-asset holders;
– Information on the underlying technology: DLT/blockchain, consensus mechanism;
– Description of the risks;
– Details of the public offering;
– Adverse climate and other environmental impacts.
Additional requirements apply to ARTs (Annex II) and EMTs (Annex III), in particular with regard to the authorisation of the issuer, the asset reserve, the redemption right and price stability.
Exemption from the white paper requirement under MiCAR
Exempt from the white paper requirement are, in particular, smaller or limited offers, such as those with an issue volume of less than EUR 1 million within twelve months or offers to fewer than 150 persons per Member State, as well as offers distributed exclusively to qualified investors.
The requirement also does not apply to offers made free of charge, to tokens created in the context of mining or validation, to certain utility tokens where they grant access to existing products or services, and to tokens that can be used exclusively for exchange against goods and services within a limited network of merchants based on contractual agreements with the provider.
Role and powers of the FMA in the white paper procedure
The white paper must generally be submitted to the FMA in Liechtenstein 20 working days prior to its publication. A legal assessment must be attached at the same time, which must in particular cover the classification of the crypto-asset and its distinction from financial instruments. The authority merely takes note of the white paper without conducting a substantive review of its content and forwards the relevant information to the (provisional) ESMA register.
Under MiCAR, the FMA has comprehensive supervisory and intervention powers. In particular, it may require amendments or additions to the white paper if it is incomplete or if additional information regarding investor protection appears necessary. Marketing communications must be submitted to the competent authority only upon its request. Furthermore, the FMA is authorised to suspend or prohibit public offers or admissions to trading, as well as to order the amendment or prohibition of marketing communications, if the requirements of MiCAR are not met or the information is misleading, unclear or incomplete.
Once the white paper has been duly submitted and published, the public offer or admission to trading is, in principle, permitted throughout the EU.
Practical information
In Liechtenstein, the white paper and any marketing communications must be submitted via the application module on the FMA’s e-Service Portal. To ensure proper submission, particular care must be taken to ensure that the white paper is in the prescribed electronic format, generally XHTML. Furthermore, a DTI number is already required for submission via the e-portal so that the crypto-asset can be uniquely identified.
In summary
MiCAR imposes key requirements on issuers regarding the transparency, content and procedures of the crypto-asset white paper. They are obliged to prepare a detailed white paper in the case of public offers or admissions to trading, to submit it to the competent authority within the prescribed time limit and to publish it. The content must be complete, clear and not misleading, and, depending on the token category, must contain specific information on the issuer, project, technology, risks and, where applicable, other regulatory elements.
In practical terms, this means, in particular, that issuers must initiate regulatory and legal review processes at an early stage, including the submission of a legal classification of the crypto-asset. It should also be borne in mind that whilst certain exemptions may allow for a reduction in obligations, the fundamental transparency and due diligence requirements must, in case of doubt, be interpreted broadly. Expert preparation is also necessary to avoid subsequent adjustments and interventions by the FMA.
The requirements of MiCAR go significantly beyond previous market standards. Early legal support from expert specialists and close coordination with the relevant supervisory authority are therefore essential to minimise liability risks and ensure smooth market access. We would be happy to support you in this regard with our legal expertise and assist you in implementing the regulatory requirements.
Authors:
Dr Giuseppina Epicoco; Mag Laura Hödl