Key Requirements Under MiCA for CASPs
With MiCA’s implementation, CASPs in Slovenia and beyond will need to meet several critical requirements to remain compliant. These rules aim to foster a more transparent, secure, and reliable crypto market, ensuring that service providers uphold the highest standards of security and professionalism. All of these rules are written at Slovenian Rules and Procedures for the Provision of Cryptocurrency Services “RTS o neprekinjenosti in rednosti pri izvajanju storitev v zvezi s kriptosredstvi”.
1. Licensing and Regulatory Approvals
CASPs in Slovenia will now need to obtain the appropriate licenses and regulatory approvals to provide cryptocurrency-related services. This means ensuring their operations are fully aligned with national and EU-wide regulations, which are designed to protect both the businesses and their customers.
2. AML/CFT Compliance
CASPs in Slovenia must implement robust customer identification procedures, along with ongoing transaction monitoring, to detect and prevent illegal activities. This includes compliance with rigorous KYC requirements that strengthen the transparency of crypto transactions.
3. Clear and Transparent Product Disclosures
CASPs in Slovenia are required to disclose detailed information about the products and services they offer, including potential risks and any guarantees provided. This is crucial for building trust and ensuring that clients fully understand what they’re investing in.
4. Cybersecurity and Data Protection
The digital nature of cryptocurrency makes it highly vulnerable to cyber threats. As such, CASPs must demonstrate a high level of security for their systems and data. This includes protecting against cyberattacks, securing transaction data, and ensuring that their infrastructure is resilient enough to withstand potential breaches.
5. MiCA Compliance: Fair and Transparent Practices
In addition to operational requirements, regulator emphasizes compliance with Article 66 of the MiCA, according to which CASPs shall:
- Act with Integrity and Transparency: CASPs are expected to act honestly, fairly, and professionally, always in the best interests of their clients and prospective clients.
- Provide Clear Information: CASPs must offer clients clear, fair, and not misleading information, ensuring that customers are fully aware of the services being provided.
- Disclose Pricing and Costs: Transparency extends to pricing, fees, and other charges. CASPs must ensure that clients are aware of all costs associated with the services they use.
- Risk Warnings: Given the volatility and inherent risks of crypto-assets, CASPs must inform clients of the risks associated with transactions in crypto-assets, helping them make informed decisions.
6. Capital Requirements
MiCA also introduces minimum capital requirements for different types of services, reflecting the varying levels of risk associated with different crypto activities:
- EUR 50,000 for basic services such as order execution, placement, and transfer of crypto-assets.
- EUR 125,000 for more complex services like the storage and exchange of crypto-assets.
- EUR 150,000 for the operation of a trading platform.
These requirements are designed to ensure that CASPs have enough financial stability to absorb shocks and protect users in the event of operational issues.
7. Transition period for companies in Slovenia
The draft law implementing the MiCA – ZAKON O IZVAJANJU UREDBE (EU) O TRGIH KRIPTOSREDSTEV does not include an additional transitional period, as required by Article 143(3) of the MiCA, but requires all CASPs to either obtain authorization by December 30, 2024, or cease providing services that require authorization under the MiCA.
8. Liability for Violations under the MiCA Regulation
ZAKON O IZVAJANJU UREDBE (EU) O TRGIH KRIPTOSREDSTEV outlines 44 types of violations and prescribes fines for both legal entities and individuals depending on the level of offense and the status of the violator. Under the proposed regulations, fines for minor violations by legal entities vary based on the entity’s size, with penalties ranging from EUR 1,250 to EUR 500,000.
Penalties for Legal Entities
1. General Penalties: Legal entities can face fines ranging from €2,500 to €250,000 for non-compliance with MiCA provisions.
2. Medium and Large Companies: If a medium or large company, as defined under business regulations, commits any offense specified in the law, it may incur fines from €10,000 to €500,000.
3. Responsible Persons: Individuals accountable within a legal entity, as well as sole proprietors and self-employed persons, can be fined between €1,250 and €10,000 for offenses under the law.
Penalties for Individuals
1. Individuals: Any individual found in violation of the law may face a fine between €2,500 and €5,000.
2. Sole Proprietors and Self-Employed Individuals: Such persons are subject to fines between €2,500 and €150,000 for violations stipulated by the law.
Conclusion
With the growing popularity of digital assets, MiCA provides a much-needed regulatory framework that aims to bring stability, security, and transparency to the crypto market.
For Slovenia, this regulatory shift represents an opportunity to foster a more trustworthy and professional environment for CASPs. The clear guidelines set forth by MiCA—ranging from licensing and anti-money laundering measures to robust cybersecurity and transparency requirements—are designed to protect consumers, enhance market integrity, and minimize systemic risks.
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