Guidelines On Reverse Solicitation By Third Country Firms Under Markets In Crypto Assets Regulation (MiCAR)

The European Securities and Markets Authority (ESMA) has issued guidelines on situations where a third-country firm is deemed to solicit clients established or situated in the EU, aiming to prevent circumvention of the reverse solicitation exemption under MiCAR (the "Guidelines"). These Guidelines are based on Article 61(3) of MiCAR. Specifically, they aim to foster convergence and promote consistent supervision regarding the risk of abuse of Article 61, which includes provisions for crypto-asset services provided at the exclusive initiative of the client. According to the Guidelines, the solicitation of clients by third-country firms should be construed broadly and in a technology-neutral manner, while the client's own exclusive initiative should be construed narrowly. This approach by ESMA aims to prevent misuse of the "reverse solicitation" concept by many third-country firms, including European parties with a third-country presence, and clarify what constitutes a