As a further part of our newsletter series on the Markets in Crypto Assets Regulation (MiCA), we deal with the market location principle applicable under MiCA, which defines the geographic scope of application.

The aim of the market location principle is to create harmonized, 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 that provide relevant services through companies based or established within the EU. Rather, MiCA also extends its scope of application to service providers from third countries, provided that their activities relate to the EU market, and subjects their services to the MiCA regime and the supervision of ESMA, EBA and the local supervisory authorities of the Member States. Issuers of utility tokens or asset referenced tokens, for example, are therefore already subject to the MiCA authorization requirements if they offer them publicly in the EU.

MiCA therefore applies to both issuers and service providers, regardless of where they are based. The only decisive factor is that the respective action relates to the EU market.

Accordingly, companies from Switzerland or other third countries wishing to offer crypto assets within the EEA or provide services covered by MiCA must meet all the requirements of MiCA to ensure that the regulator of the EEA state concerned does not impose any supervisory measures. Such measures would include, for example, the prohibition of activities and the imposition of fines.

Due to the adoption decision of the EEA Joint Committee to be taken shortly, the MiCA will also apply to the EEA states and thus also to Liechtenstein. Accordingly, a license granted by the Liechtenstein regulator under MiCA also authorizes access to the EEA market.

As is well known, Liechtenstein already has many years of experience in regulating crypto services and crypto assets, as well as attractive corporate law and tax law. In the past, this has already led to a large number of crypto-related companies operating out of Liechtenstein. Accordingly, it is recommended that service providers from Switzerland and other third countries intending to enter the EEA market offer crypto assets and services via Liechtenstein in order to gain efficient access to the EU/EEA market and at the same time meet the requirements of MiCA.

Our law firm has been advising companies on obtaining the necessary licenses for the provision of crypto services and the issuance of crypto assets for many years and has extensive experience in this area.

5| 2023