Why the EU’s established Investment Firms have the edge in MiCA compliance
In the rapidly evolving world of crypto-assets, regulatory frameworks are essential to ensure stability and security. The Markets in Crypto Assets (MiCA) regulation is the European Union's response to this need. While MiCA applies to a broad spectrum of market participants, existing investment firms established in the EU hold a distinct advantage when it comes to compliance. Here's why they are poised to excel under MiCA's watchful eye:
Streamlined Authorisation: Unlike newcomers, existing investment firms do not need to navigate the full authorisation process to offer crypto-asset services. They only need to notify their supervisory authority, significantly reducing the regulatory burden and time to market.
Familiarity with EU Regulation: EU-based investment firms are well-versed in the EU's approach to financial regulation. This familiarity reduces the upskilling required to comply with MiCA's intricate requirements, ensuring a smoother transition, and reducing the risk penalties for non-compliance.
Regulatory Infrastructure: Established investment firms already have robust regulatory processes in place, including capital and liquidity adequacy assessments. This means they can sidestep the need to develop complex new systems and processes, helping ensure compliance from day one.
Strong Capitalisation: Most established investment firms are already sufficiently well-capitalised. This financial strength means they can avoid the need to raise additional capital, allowing them to focus on growth and innovation.
Banking Relationships: Access to banking and payment facilities can be a significant challenge for crypto-native firms. Established investment firms, on the other hand, have well-established banking arrangements in place, further reducing their time-to-market.
Customer Trust: Trust is paramount in the world of finance. Existing investment firms have already built trusted relationships with customers, a valuable asset when venturing into the crypto-asset space.
In Conclusion: With their streamlined authorisation process, regulatory experience, existing infrastructure, financial strength, banking relationships, and customer trust, existing investment firms are poised to play a substantial role in the development of the EU's crypto-asset markets. MiCA provides an opportunity for these firms to leverage their strengths and drive innovation in the evolving crypto landscape.
As MiCA continues to shape the crypto regulatory landscape, established investment firms are well-positioned to lead the way, ensuring a safe and prosperous future for the EU's crypto-asset markets.
If your firm is looking to take get ahead in the European crypto and digital assets market, Braithwate offers specialised MiCA compliance advisory. Our comprehensive range of services spans both crypto-native and traditional financial institutions, including crypto exchanges, token issuers, crypto funds, and traditional financial institutions entering the crypto space. Here's how we can assist you:
1. Crypto Asset Strategy: Whether you are a crypto-native business or a traditional financial services firm venturing into the crypto space, we have the expertise to help you define a robust business strategy that aligns with regulatory requirements. We ensure that your strategy operates seamlessly within regulatory perimeters, setting the foundation for sustainable growth.
2. Regulatory Compliance: Achieving and maintaining compliance with MiCA can be complex. Regardless of where you are in your crypto journey, we can guide you through the regulatory landscape in a pragmatic way. Our services include designing relevant documentation such as crypto-asset white papers, policies, and procedures. We leverage our in-house developed toolkit to accelerate your path to compliance, ensuring a smooth transition.
3. Risk Management: Effective risk management is crucial in the crypto-asset markets. We can assist you in designing and implementing risk management and control frameworks that are tailored to your business capabilities and size. From conducting initial risk identification to mapping control gaps and designing risk mitigation activities, we cover the end-to-end lifecycle of risk management requirements.
4. Out-of-the-box solutions: In partnership with Clausematch, we have developed an out-of-the-box solution for MiCA compliance, further accelerating our client’s time to market.
Anna Nicolis, Director at Braithwate says: "Our collaboration with Corlytics utilising Clausematch solution is a testament to our dedication to providing innovative and tailored solutions to our clients. I am excited to leverage their cutting-edge technology offering policy standardisation, enhanced audit trails, and regulatory traceability specific to MiCA. This will help our clients manage the new wave of crypto-regulation with an intuitive and robust workflow."
Evgeny Likhoded, President at Corlytics, says: "We have always valued our partners that have deep domain expertise and can provide their service bundled with technology. Our partnership with Braithwate is a big step forward in our mission to empower organisations to implement and maintain the highest governance and compliance standards, which are essential for crypto business landscape."
Freddie Frith, VP, Global Head of Sales of the Clausematch platform, comments: "We are thrilled to initiate our partnership with Braithwate, which brings forth numerous opportunities in providing a blend of best-in-class technology and regulatory consultancy services. Our collaboration will begin by offering solutions that cater to specific regulations which have a high impact on certain industries to maintain compliance and operate safely, firstly focusing on MiCA — the latest crypto regulation in the EU. Our OOTB solution encompasses MiCA-related regulations, policies, and procedures, supported by templates and pre-mapped structures to evidence meeting specified obligations. This powerful combination empowers companies to maintain a competitive edge in this dynamic sector."
At Braithwate, we understand that navigating the regulatory complexities of the crypto-asset markets can be challenging. Our MiCA compliance advisory services provide you with the guidance and expertise needed to thrive in this evolving landscape. Whether you are a crypto-native startup or an established financial institution, we are here to support your compliance journey and ensure your success in the exciting world of crypto assets.
Contact Braithwate today to learn more about how our MiCA compliance advisory services and solutions can empower your business and position you for success in the crypto-asset markets.
