ESMA Consults On The 'Classification Of Crypto-Assets As Financial Instruments' And 'Reverse Solicitation' Under MiCA

The European Securities and Markets Authority (ESMA) has just published two consultation papers on two important aspects under the Markets in Crypto Assets Regulation (MiCA), namely:

• Draft Guidelines on Reverse Solicitation under MICA; and
• Draft Guidelines on the Conditions and Criteria for the Qualification of Crypto-Assets as Financial Instruments.

Consultation Paper on Reverse Solicitation

This consultation paper confirms ESMA's previous stance on reverse solicitation.

A (non-EU) third-country firm will not be able to solicit EU-based clients unless an appropriate licence is sought from a European Regulator. There is only one exception – when the crypt-asset service is requested at the "exclusive initiative" of the EU-based client (i.e. the so-called reverse solicitation exemption). ESMA stresses that this exemption should be construed very narrowly and cannot be exploited to circumvent MiCA.