1. Preventing unintentional Offers to the Public on the Secondary Market
Article 3 (1) point 12 MiCAR defines an offer to the public as any communication that contains sufficient information about the terms of the offer and the crypto-assets themselves, providing prospective holders with sufficient basis for their purchase decision. In such cases, the obligations under Title II (requirement for a crypto-asset white paper pursuant to Article 4 MiCAR) apply, or – depending on the type of crypto-asset – the further requirements for issuers under Title III or Title IV MiCAR (authorisation or licensing).
According to Article 143 (1) MiCAR, Title II does not apply to offers to the public that ended before 30 December 2024. As a result, many crypto-assets currently traded on the secondary markets do not have crypto-asset white papers. Based on the FMA’s established practice, presenting price data per se does not constitute a (renewed) offer to the public. See the European Securities and Markets Authority (ESMA) Q&As 981. Since crypto-assets service providers (CASPs) often provide extensive information for supervisory reasons, more detailed information is frequently publicly accessible.
The decisive factor for identifying an offer to the public of a crypto-asset is whether the communication merely describes the service – which is particularly relevant for services pursuant to Article 3(1) 1 point 16 lits. c-e and g-i – or whether in addition a specific crypto-asset is highlighted in a promotional manner. Where the latter occurs in a way that indicates a specific, targeted intention to sell the promoted crypto-assets, the legal consequences under Titles II-IV MiCAR generally apply. See the ESMA Q&As 2404 in this regard.
2. Conduct Obligations for CASPs when describing Crypto-Assets outside of an Offer to the Public
According to Article 66 MiCAR, CASPs are required to provide clients with basic information about the services offered and the relevant crypto-assets. In practice, this is typically done by means of brief descriptions of the crypto-assets.
Depending on the wording, such descriptions may create an impression of an intention to sell regarding specific crypto-assets. In the specific circumstances of the case in hand, this might potentially meet the criteria for an offer to the public. Therefore, CASPs should observe the following:
- Use neutral language: Comparative and evaluative expressions should be avoided (e.g., use of comparatives or superlatives)
Negative example: “X-Network is a faster version of Bitcoin.”
- Create linguistic distance from the project and its claims: avoid reproducing claims or promises of value/performance in a direct or unqualified manner
- Use indirect speech
- Use qualifying verbs (e.g., “claims to”, “aims to”, “intends to”)
Negative example: “X-Network is a network that enables the automation of decentralised financial products.”
Alternative: “X-Network claims to be developing a network, designed to automate decentralized financial products.”
- Provide information on the quality and scope of the due diligence review conducted by the CASP:
- Include a disclaimer stating that the CASP performs due diligence as a part of the listing process, but due to a lack of a white paper (under MiCAR) and due to limited insight into the project, no detailed or comprehensive assessment has been conducted regarding the project’s viability or the accuracy of publicly available information
- Explicitly deny endorsement or approval of the project by the CASP:
- Include a disclaimer stating that the CASP (if applicable) is not affiliated with the project and does not endorse or support its public statements or promises.
The specific form of the above disclaimers is at the CASP’s discretion. However, such disclaimers should be placed in close proximity to the specific description of the crypto-asset, and not merely included in general terms and conditions or broad disclaimers.
3. Key Considerations regarding “Unauthorised Stablecoins”
If the promotion of a service is carried out in accordance with the legal requirements, the lack of an available white paper is generally not problematic for “other” crypto-assets involved in the service, due to the transitional provisions under Article 143 MiCAR. What matters is the lawfulness of the promotional communication.
However, under the conduct obligations of Article 66 MiCAR and the prudent person principle, additional restrictions apply to the promotion of services that relate to Asset-Referenced Tokens (ARTs) and E-Money Tokens (EMTs) which do not hold the required authorisation within the EU (i.e. unauthorised stablecoins).
The FMA explicitly warns that actively promoting such services involves significant regulatory risks. Companies are therefore expected to refrain from promotional activities of such services. Further limitations for individual crypto-asset services can be found in ESMA Q&As 2404. Furthermore, companies should continuously review whether the provision of the affected services remains legally compliant. In doing so, they should pay particular attention to relevant publications issued by the European and national supervisory authorities.