The European Banking Authority (EBA) has recently released its supervisory priorities for 2024/2025, focusing on issuers of e-money tokens (EMTs) and asset-referenced tokens (ARTs) under the Markets in Crypto-Assets Regulation (MiCAR). These priorities signal that the crypto industry is under increased scrutiny, and compliance is non-negotiable.
Key Takeaways:
Internal Governance and Risk Management:
Establish clear roles and responsibilities within your organisation.
Ensure your management team has the necessary skills and expertise in the crypto sector.
Identify, manage, and disclose any conflicts of interest.
Implement robust procedures for handling complaints.
Develop a risk management framework proportionate to your firm's size and complexity.
Thoroughly assess third-party dependencies and outsourcing risks, especially regarding custody arrangements.
Financial Resilience:
Maintain strict compliance with own funds and reserve asset requirements.
Ensure the quality of your reserve assets meets regulatory standards.
Technology Risk Management:
Assess and mitigate ICT risks related to distributed ledger technology (DLT), smart contracts, and cyber threats.
Evaluate your operational resilience and establish contingency plans for DLT disruptions.
Financial Crime Risk Management:
Conduct thorough due diligence on individuals involved in ART/EMT issuance to prevent financial crime risks.
Implement adequate financial crime controls, including anti-money laundering (AML) and combating the financing of terrorism (CFT) measures.
Collaborate with relevant AML/CFT authorities.
What Does This Mean for You?
If you're involved in issuing EMTs or ARTs, these supervisory priorities are your new roadmap for compliance. Ignoring them is not an option, as the EBA is committed to fostering a level playing field and protecting consumers in the crypto market.
The Bottom Line:
The EBA's focus on internal governance, risk management, technology, and financial crime underscores the need for a comprehensive approach to compliance. By prioritising these areas, you can demonstrate your commitment to responsible innovation and contribute to a more secure and sustainable crypto ecosystem.