Crypto Breaking News posted: "The European Banking Authority (EBA) and the European Securities and Markets Authority (ESMA) on Oct. 20 jointly released a consultation paper featuring two drafts. These drafts encompass the assessment of the suitability of management body members and sh" Crypto Breaking News
The European Banking Authority (EBA) and the European Securities and Markets Authority (ESMA) on Oct. 20 jointly released a consultation paper featuring two drafts. These drafts encompass the assessment of the suitability of management body members and shareholders or members holding qualifying stakes in issuers of asset-referenced tokens (ARTs) and crypto-asset service providers (CASPs).
The proposed joint guidelines for evaluating the suitability of shareholders or members, whether direct or indirect, holding qualifying stakes in ART or CASP issuers, offer regulatory bodies a shared approach for assessing their suitability. This includes granting authorization for ART and CASP issuance and conducting prudential assessments for potential acquisitions.
However, the proposed joint guidelines for assessing the suitability of management body members in ART and CASP issuer firms offer standardized criteria for evaluating their knowledge, expertise, integrity and ability to dedicate adequate time to fulfill their responsibilities.
Screenshot of the consultation paper. Source: The European Banking Authority
To nurture and safeguard the integrity of the cryptocurrency market and its associated services, and to instill trust, it is crucial to ascertain the suitability of both the management body members of ART and CASP issuers and individuals seeking to hold or acquire qualifying stakes in them.
The guidelines outlined in these drafts aim to offer clarity and standardization in evaluating the suitability of the management body, shareholders, and members holding qualifying stakes. This, in turn, aims to minimize the potential for rule application discrepancies and arbitrage as the consultation period will remain open until Jan. 22, 2024.
Anticipating forthcoming regulations, the European Union's banking regulator encouraged stablecoin issuers to voluntarily adhere to specific "guiding principles" related to risk management and consumer protection. The EBA unveiled its initial set of measures for public input on July 12, aiming to elucidate the requirements of the Markets in Crypto-Assets regulation (MiCA), which is slated to be enforced on June 30, 2024.
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