As another part of our newsletter series on the Markets in Crypto Assets Regulation (MiCA) in Liechtenstein, we address the market principle applicable under MiCA, which defines the geographic scope of application.
The aim of the market principle is to create harmonised, fair competition within the entire market and to limit the possibilities of circumventing the regulatory regime by establishing branches outside the EU.
Accordingly, MiCA does not only cover companies providing relevant services through companies established or domiciled within the EU. Rather, MiCA also extends its scope to all service providers from third countries, provided their activities relate to the EU market, and puts their services under the MiCA regime and the supervision of ESMA, EBA and the domestic regulators of each Member State. Issuers of utility tokens or asset referenced tokens, for example, therefore already fall under the MiCA licensing requirements if they publicly offer them in the EU.
For both issuers and service providers, MiCA is therefore applicable regardless of where their registered office is located. The only decisive factor is that the respective action relates to the EU market.
Thus Companies from Switzerland or other third countries that want to offer crypto assets or provide services covered by the MiCA within the EU/EEA must fulfil all the requirements of MiCA, to avoid that the regulator of the affected EEA state takes supervisory measures, such as the forbidding of the activity and imposition of fines.
Due to the adoption decision of the EEA Joint Committee, which will shortly be taken, the applicability of MiCA will also extend to the EEA states and thus also to Liechtenstein. Thus also a license granted by the Liechtenstein regulator under MiCA entitles to access the entire EU/EEA market.
As is well known, Liechtenstein already has many years of experience with the regulation of crypto services and Cryptoassets and also provides for an attractive company law and tax law. This already in the past encouraged many crypto related companies to start their business from Liechtenstein. Accordingly service providers from Switzerland and other third countries intending e to enter the EEA market should offer crypto assets and services through Liechtenstein and thus gain efficient access to the EU/EEA market while complying with MiCA requirements.
Our firm has been advising companies on obtaining the necessary licences for the provision of crypto services and issuance of crypto assets for years and has thus extensive experience in this area.
5 | 2023