Crypto-Assets and AML: Agreement on MiCA; AML Action Plan progresses

Agreement on MiCA:

The EU Council and European Parliament reached provisional agreement on MiCA (the
proposed EU regulation on markets in crypto-assets) following 3 months of trilogue
This comprehensive framework is designed to bring about EU-wide clarity, cohesion and
investor protection, and ensure financial stability, by requiring crypto-asset service providers
(CASPs) to be authorised in order to operate within the EU. CASPs authorised under MiCA
will then be able to passport their services throughout the EU. As with most key areas of EU
financial services legislation, sustainability-related disclosures are also envisaged.
Stablecoins were a particular focus area as MiCA progressed – issuers of stablecoins will be
subject to liquidity requirements and will need an EU presence. All stablecoins will be subject
to supervision by the European Banking Authority.
For the time being, non-fungible tokens (NFTs) are out-of-scope, but the European
Commission will look at this again 18 months after MiCA comes into force to see if an NFT-
related regime is warranted.
On the date on which MiCA is published in the Official Journal, it is expected to apply 18
months later (timing remains to be confirmed).

Transfers of Crypto-Assets:

Provisional agreement on MiCA followed quickly after provisional agreement was reached
on 29 June on updates to the regulation on information accompanying transfers of funds to
capture transfers of crypto-assets.
This forms part of the Commission’s AML Action Plan.
The intention is to require CASPs to collect, and make accessible, certain information about
the originator and the beneficiary of crypto-asset transfers operated by them to ensure
traceability (known as the ‘travel rule’). CASPs will also be required to implement related
appropriate internal policies, procedures and controls. Ultimately, CASPs will become
obliged entities for AML/CFT purposes, in line with FATF’s recommendations (with FATF
also soon publishing an update focusing on the 'travel rule').
The application date for the updated transfer of funds regulation is expected to be aligned
with the MiCA application date.


In a related development, the EU Council confirmed its partial position on the proposal to
create a dedicated EU Anti-Money Laundering Authority (AMLA) under the AML Action Plan
– it is pushing for the scope of AMLA’s direct supervision powers to be widened, but has not
yet agreed on where AMLA will be based.

This Statement does not constitute legal advice or consultation but is rather an expression of
Dimitrova, Staykova & Partners Law Firm team’s opinion.