Only 9% Of Crypto Firms Are Fully Prepared For EU’s MiCA Rules

Only 9% of the firms that were in scope for the European Union’s Markets in Crypto Assets Regulation (MiCA) are fully prepared for the upcoming rules, according to a study from Acuiti commissioned by Eventus.

Based on a survey and series of interviews with senior executives at 68 firms engaged in crypto trade across the buy-side, sell-side and exchanges, the study also found that a quarter of firms had not begun preparations.

With MiCA coming into effect at the end of the year, market participants are now moving to establish market surveillance systems to comply with the new regime. MiCA will be one of the first comprehensive regulatory frameworks for crypto trading to be developed in a major financial jurisdiction.

64% of firms plan to outsource to a 3rd party vendor

When it comes to market surveillance, the MiCA regulation is based upon requirements set out in the EU’s Market Abuse Regulation (MAR).

For many firms, there will be a significant operational lift to put in place the systems required to be compliant. Many firms were not even sure if they were in scope, according to the study. As to the ones in scope, one quarter had not yet started preparation. Just under a third were at an early stage of preparation, while just over a third were at an advanced stage.

Firms investing in new systems were typically looking at outsourcing to a third-party software vendor with 64% planning to do so, the study found.

Lack of awareness as to who is in scope of MiCA

Ross Lancaster Head of Research at Acuiti, said: “For firms that are not already operating under MIFID II, MiCA will present a significant operational lift to become compliant, and it is no surprise that we found that firms were looking to third-party vendors to assist them in their preparations. There is a relative lack of awareness among some areas in the market as to who is in scope, which will need to be addressed if firms are going to have time to get ready for compliance.”

Travis Schwab, CEO of Eventus, said: “While there are commonalities in trade surveillance across asset classes, digital assets can present some unique challenges. We invested significantly beginning several years ago in ensuring we could meet the needs of this sector, including the ability to handle real-time alert generation covering billions of messages per day, 24×7. Regulation in the EU is only the beginning of new regulatory guidelines we expect to see in jurisdictions across the globe in the coming years.”

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