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ESMA Guidelines on reverse solicitation ahead of MiCA implementation

Key provisions of the standards

The Regulation (EU) 2023/1114, also known as MiCA, was adopted by the European Parliament and the Council on May 31, 2023, and subsequently published in the EU Official Journal on June 9, 2023. This regulation governs markets in crypto-assets and grants ESMA the authority to develop technical standards and guidelines to clarify its provisions.

Among the areas addressed by the regulatory technical standards (RTS) is the issue of reverse solicitation. Article 61(3) of MiCA mandates ESMA to define:

  1. Circumstances under which a third-country firm is considered to solicit clients based in the EU.
  2. Supervisory measures to identify and prevent the evasion of MiCA rules.

Among the areas addressed by the regulatory technical standards (RTS) is the issue of reverse solicitation. Article 61(3) of MiCA mandates ESMA to define: Circumstances under which a third-country firm is considered to solicit clients based in the EU. Supervisory measures to identify and prevent the evasion of MiCA rules.

ESMA has emphasized that, under MiCA, crypto-asset services provided by third-country firms are strictly limited to cases initiated exclusively by the client (the “reverse solicitation” exemption). This exemption is narrowly defined, serving as an exception rather than a rule, and cannot be presumed or exploited to bypass MiCA requirements.

Overview of the regulatory framework

Under Article 59(1) of MiCA, only entities authorized as crypto-asset service providers (CASPs) or certain EU-authorized financial entities (following a notification process) are allowed to offer crypto-asset services within the EU. Additionally, Article 59(2) stipulates that authorization as a CASP is reserved for firms with a registered office in an EU Member State.

Article 61(2) of MiCA permits third-country firms to offer related crypto-assets or services of the same type originally requested by the client without contravening authorization rules.

Consequently, third-country firms are generally prohibited from providing crypto-asset services in the EU. However, an exception exists: when a client based in the EU independently and exclusively initiates contact to request a crypto-asset service, the third-country firm may fulfill this request without breaching MiCA’s authorization requirements.

The rationale behind this exemption is to ensure EU-based clients are not barred from accessing services offered by third-country firms if such engagement is initiated solely by the client. Furthermore, Article 61(2) of MiCA permits third-country firms to offer related crypto-assets or services of the same type originally requested by the client without contravening authorization rules.

Detailed guidelines on the application of Article 61 are provided in Annex III.

Next steps

The guidelines outlined in Annex III will be translated into all official EU languages and published on the ESMA website. This publication will mark the beginning of a two-month period during which national authorities must inform ESMA of their compliance intentions. The guidelines will become effective three months after the publication of the translations.

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Author team leader DKP Legal Piotr Glapiński
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