Key Insights
- ESMA clarifies that while MiCA doesn’t specifically regulate staking, staking services fall under custody service provisions and require authorization.
- Staking service providers must comply with MiCA requirements, including asset segregation, risk minimization, and liability for losses related to staking activities.
- CASPs offering staking services must obtain explicit client consent and ensure the ability to return staked assets, emphasizing consumer protection in the crypto sector.
PARIS (MarketsXplora) – The European Securities and Markets Authority (ESMA) has issued new guidance on the treatment of cryptocurrency staking services under the Markets in Crypto-Assets (MiCA) regulation, providing clarity for the burgeoning sector.
In a Q&A document released today, ESMA, in conjunction with the European Commission, stated that while MiCA does not contain specific provisions for staking, the practice itself is not prohibited nor subject to specific licensing requirements.
The guidance distinguishes between direct staking by crypto asset holders and staking-as-a-service provided by intermediaries. The latter, where service providers stake clients’ assets for a fee, falls under MiCA’s purview due to its ancillary nature to custody services.
“Staking service providers must be authorized under MiCA to provide custody and administration of crypto-assets on behalf of clients,” an ESMA spokesperson said.
This authorization, as outlined in Article 75 of MiCA, comes with a host of obligations including asset segregation, risk minimization, and liability for asset loss.
Read also! CySEC Launches MiCA Consultation, Seeks Industry Input
Implications for CASPs
The regulator emphasized that Crypto-Asset Service Providers (CASPs) offering staking services must ensure client assets can be returned as per custody agreements. Notably, CASPs will be held liable for any losses stemming from staking activities or services provided to clients.
“This clarification is crucial for consumer protection in the rapidly evolving crypto landscape,” said a senior EU official familiar with the matter.
ESMA also mandated that CASPs obtain explicit consent from clients before staking their assets, acknowledging the potential impact on asset accessibility.
The guidance comes as the EU prepares for the full implementation of MiCA, set to bring comprehensive regulation to the crypto asset industry. Industry observers note that this clarification could significantly impact the operations of staking service providers within the EU.