EBA and ESMA Release Consultation Paper on Assessing Suitability for Crypto-Asset Service Providers
The European Banking Authority (EBA) and the European Securities and Markets Authority (ESMA) published a joint consultation paper on two draft guidelines.
On October 19, the European Banking Authority (EBA) and the European Securities and Markets Authority (ESMA) published joint guidelines that include granting authorization for asset-referenced tokens (ARTs) and crypto-asset service providers (CASPs) issuance and conducting prudential assessments for potential acquisitions.
The draft guidelines pertain to the evaluation of the fitness and suitability of individuals serving on the management team, as well as the suitability of shareholders and individuals with significant holdings in companies that issue ARTs and CASPs, while also establishing standardized criteria for assessing their knowledge, skills, experience, integrity, and commitment to their roles.
The guidelines stated in these draft documents have the purpose of providing clear and consistent criteria for assessing the suitability of management members, shareholders, and those with significant stakes in these entities. By doing so, they seek to reduce the likelihood of any differences in rule application and potential rule exploitation.
Notably, the draft guidelines are being issued in accordance with the Markets in Crypto-Assets Regulation (MiCA), which establishes a comprehensive regulatory framework for crypto-assets in the European Union and is expected to enter into force in 2024.
The goal of these consultation guidelines is to reduce the possibility of inconsistencies in rule application and regulatory arbitrage. This assessment helps maintain transparency and reliability within the industry.
It's important to note that the consultation period for these
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