The Markets in Crypto Assets Regulation (MiCAR) is the first package of European legislation that was enacted to regulate cryptocurrencies and related services. The EU saw the need for specific rules addressing market abuse in crypto-assets to “ensure confidence (…) and integrity of those markets.” This is justified by the fact that many “issuers of crypto-assets and crypto-asset service providers are very often SMEs”. Applying the full scope of Regulation (EU) No 596/2014 on market abuse (MAR) to them would have been deemed disproportionate.
One might expect MiCAR’s market abuse provisions to reflect the unique characteristics of crypto-markets, but surprisingly, they largely mimic MAR’s provisions, which apply to abuses involving traditional financial instruments. The relief suggested in Recital 95 is mostly limited to the exclusion of some MAR obligations from MiCAR. MiCAR has just seven articles dedicated to market abuse, compared to MAR’s 39. Key MAR obligations, such as maintaining insider lists (Article 18 MAR) or disclosing managers’ transactions (Article 19 MAR), are omitted, which could hinder the ability of crypto-market actors to comply with market abuse regulations and prevent prohibited behaviours.
Moreover, MiCAR does not incorporate a number of exemptions, such as those concerning buy-back programs and stabilization (art. 5 MAR), legitimate behaviours by insiders (art. 9 MAR) and accepted market practices related to market manipulation (art. 13 MAR). This results in MiCAR being stricter than MAR if interpreted autonomously. An interpretation of MiCAR “in light of MAR” might not bridge the existing gap. Such an approach would raise doubts about the need for a separate regulatory regime for crypto-assets. Wouldn’t it have been simpler and more effective to extend the scope of MAR to include crypto-assets? Doing so would have provided more regulatory certainty, as MAR’s rules are already well known.
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