We’re launching a new digital coin and plan to offer it to people in Europe.
What do we need to tell people about our coin before they buy it, according to MiCA rules?
Understanding the Legal Question
The question posed relates to the regulatory requirements for disclosing information about a newly launched digital coin, which is to be offered for sale in Europe. The user is seeking guidance on what specific details need to be provided to potential buyers in compliance with the Markets in Crypto-Assets Regulation (MiCA) rules. The implied objective is to prepare for a transparent and legally compliant coin offering, ensuring that necessary and accurate information is communicated to potential investors in accordance with European Union regulations.
Ambiguities in the Legal Question
Type of Digital Coin: The exact nature or classification of the digital coin (e.g., asset-referenced token, e-money token, utility token, etc.) is not specified, which affects the regulatory requirements it needs to fulfill.
Scope of Offer: The geographical scope of the offer within Europe, or if it targets specific member states, is unclear, which may influence notification and publication requirements.
Role of the User: Whether the user’s entity is the issuer, offeror, or an intermediary acting on behalf of the issuer is not mentioned; different roles may carry different disclosure obligations.
Timing of the Offer: The timeline for when the digital coin will be offered to the public is not provided, which affects the timeline for fulfilling the information disclosure requirements.
Marketing and Communications: Whether the user plans to undertake marketing or promotional activities for the digital coin offering is not described, which has implications for compliance with marketing communications rules under MiCA.
Assumptions for the Legal Analysis and the Plan for the Junior Lawyer
Note: The junior lawyer is what we call a subsystem of Hotseat that completes helper tasks
Assume that:
The digital coin is considered a crypto-asset under MiCA rules and may fall within categories like asset-referenced tokens or e-money tokens, given their typical use for offer to the public.
The offering is intended for the public in multiple EU member states.
The user represents the issuer of the digital coin.
The coin will be offered in the near future, requiring compliance with current MiCA disclosure obligations.
Marketing and promotional activities will accompany the coin offering, necessitating adherence to marketing communication regulations under MiCA.
Plan for the Junior Lawyer:
Step-by-Step Analysis:
Identify the Type of Crypto-Asset:
Access Annex I, which might provide information on disclosure for crypto-assets in general.
Review Disclosure Obligations:
Examine Article 4 to identify the general obligations and requirements for offers to the public and admission to trading of crypto-assets other than asset-referenced tokens or e-money tokens.
Check Article 6 to understand the specifics regarding the content and format of a crypto-asset white paper required before offering coins to the public.
Go through Article 7 to discern rules regarding marketing communications, which might prescribe specific information that needs to be provided in promotions.
Assess Particular Requirements for Asset-Referenced Tokens:
If the digital coin can be classified as an asset-referenced token, access and analyze Article 16 to get insight into authorisation and operating conditions that affect the information disclosed to the public.
Check Article 19 for detailed requirements for crypto-asset white papers specific to asset-referenced tokens.
Access Article 29 for an understanding of marketing communications rules specific to asset-referenced tokens.
Scrutinize Obligations for E-Money Tokens:
If the digital coin is akin to an e-money token, review Article 48 to learn about the disclosure requirements specific to e-money tokens before the coin can be offered to the public.
Confirm Pre-Offer Disclosures:
Access Article 13 to confirm if the right of withdrawal implications for retail holders need to be disclosed.
Examine Article 14 to determine the obligation of the coin offeror to act honestly, fairly, and professionally, which may influence the content of disclosures.
Assess Stipulations for Marketing Communications:
Access Article 7 for regulations on consistency and fairness in marketing and how this impacts information disclosure before a coin purchase.
Access Article 29 for asset-referenced tokens or Article 53 for e-money tokens to assess specific restrictions or obligations related to the marketing of these coins.
Prepare Documentation:
Organize the gathered information and craft a guidance document outlining the required disclosures based on the classification of the digital coin and relevant MiCA Articles.
Compile Regulatory Summary:
Create a comprehensive summary, combining insights from the Articles reviewed, structured based on the type of crypto-asset and specifying the required disclosures to inform potential buyers accordingly.
Definitions and Terms from the Markets in Crypto-Assets Regulation (MiCA):
Crypto-Asset: A digital representation of value or rights, which may be transferred and stored electronically, using distributed ledger technology or similar technology.
Asset-Referenced Token: A type of crypto-asset meant to maintain a stable value by referencing one or more currencies that are legal tender, one or more commodities, one or more crypto-assets, or a basket of such assets.
E-Money Token: A type of crypto-asset that purports to maintain a stable value by referencing one official currency.
Crypto-Asset White Paper: A document provided by the offeror or issuer of a crypto-asset that outlines the key aspects and features of the crypto-asset being offered to the public, or admitted to trading, including details regarding the project, risks, rights and obligations, and the underlying technology.
Marketing Communications: Communications that promote, directly or indirectly, the crypto-assets that are subject to an offer to the public or admission to trading.
Question Clarity Rating
Somewhat clear
Clarity Rating Explanation
The original question indicates the user’s intent to comply with MiCA while launching a digital coin in Europe, which indicates awareness of regulatory obligations. However, there are ambiguities regarding the specific aspects of the digital coin, related activities (like marketing or ICOs), and targeted jurisdictions that could impact compliance obligations. Substantial assumptions had to be made regarding these details, which are crucial for determining the regulatory requirements for disclosure under MiCA.