Unpacking MICA second consultative Paper

🌐📝 The European Securities and Markets Authority (ESMA), the European Union's markets regulator, has recently released a second consultative paper on Markets in Crypto-Assets (MiCA) mandates. This 307-page document, published on October 5th, seeks stakeholders' input on five key areas of MiCA. These areas include sustainability indicators for distributed ledgers, disclosures of inside information, technical requirements for white papers, trade transparency measures, and record-keeping for crypto-asset service providers (CASPs). 📊🔍

🌿📈 Among the sustainability indicators, the ESMA counts quantitative metrics on the consumption of energy, greenhouse gas emissions, and the production of waste. It also includes a qualitative statement on the impact of the use of equipment by blockchain network nodes on natural resources. This is a significant step towards understanding the environmental impact of blockchain technologies and finding ways to make them more sustainable. 🌍💡

🔐📚 In terms of post-trade transparency, the ESMA proposes requiring CASPs to report trading and publication date and time, identification of the crypto-asset, pricing information, quantity, venue of execution, and transaction ID. This move is aimed at increasing transparency in the crypto-asset market and ensuring that all transactions are traceable and accountable. 📈🔎

📂🔧 The ESMA also suggests allowing CASPs to store transaction data in "the format they consider most appropriate," provided they are able to convert it into a specified format should the authorities request it. This flexibility is designed to accommodate the diverse range of systems and processes used by different CASPs, while still ensuring that essential data can be accessed and analyzed by regulatory authorities when necessary. 🗄️🔄

📅📈 The regulator plans to publish a final report based on feedback received and submit the draft technical standards to the European Commission by June 30, 2024. However, before that, it will also publish a third consultation package in Q1 2024. This iterative consultation process is part of the ESMA's commitment to engaging with stakeholders and refining its approach based on their input. 🔄👥

📝🔍 The ESMA released the previous consultation paper in July. In it, the ESMA proposed to require the crypto companies, which would be registered under MiCA, to still provide additional information in the form of notifications to the national competent authorities of the country they would be registered in. This proposal underscores the ESMA's focus on ensuring that crypto companies operate in a transparent and accountable manner. 🏢🔐

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