A recent report highlights the impending impact of the European Union's Markets in Crypto Assets Regulation (MiCA) on cryptocurrency trading surveillance. Commissioned by Eventus, the report, "The Impact of MiCA on Crypto Market Surveillance: Insights and Challenges," draws from interviews with senior executives at 68 firms involved in crypto trade, conducted by Acuiti.

MiCA Compliance: Progress and Challenges

MiCA, a pioneering regulatory framework within a major financial jurisdiction, is prompting a surge in efforts to establish comprehensive market surveillance systems across the industry. The regulation, akin to the EU's Market Abuse Regulation (MAR), mandates stringent requirements for market participants, ushering in new operational standards.

According to the findings, only 9% of surveyed firms fully comply with MiCA requirements, with a significant 25% yet to commence preparations. As MiCA's implementation deadline approaches at year's end, firms are urged to ascertain their regulatory scope promptly and initiate compliance measures.

Despite challenges, such as identifying suitable third-party software vendors and navigating compliance costs, the report notes a growing sophistication in market surveillance practices. Even among firms initially excluded from MiCA's scope, 57% already employ robust surveillance systems.

"For firms that are not already operating under MIFID II, MiCA will present a significant operational lift to become compliant, and it is no surprise that we found that firms were looking to third-party vendors to assist them in their preparations," said Ross Lancaster, Head of Research at Acuiti.

"There is a relative lack of awareness among some areas in the market as to who is in scope, which will need to be addressed if firms are going to have time to get ready for compliance."

Outsourcing Trends and Compliance Costs

The study highlights consultations on MiCA's final technical standards, revealing that 25% of affected firms have yet to initiate preparations, while others are at various stages of readiness. Notably, 64% of firms intend to outsource system development, anticipating challenges in vendor selection and resource allocation.

Key concerns among firms anticipating MiCA's impact include compliance costs and securing qualified personnel, reflecting broader industry adjustments to regulatory mandates. As regulations change, industry leaders must adjust to new rules under MiCA.

Eventus CEO Travis Schwab said: "We invested significantly beginning several years ago in ensuring we could meet the needs of this sector, including the ability to handle real-time alert generation covering billions of messages per day, 24x7. Regulation in the EU is only the beginning of new regulatory guidelines we expect to see in jurisdictions across the globe in the coming years."