Does the Market Integration Package change MiCAR?

What is the Commission proposing regarding CASPs under MiCAR?

The amendments to MiCAR propose to transfer the supervision of CASPs from NCA to ESMA. ESMA will become responsible for the authorisation, ongoing supervision, and enforcement of MiCAR in relation to CASPs.

Regarding already regulated entities, such as investment firms, that are allowed to provide crypto-asset services without being required to obtain an authorization as a CASP, they would continue to be supervised by the competent authorities that granted them authorisation under other Union acts.
However, if the provision of crypto-asset services becomes their main activity of these entities, the supervision for all their activities will be transferred to ESMA, except for banks, as they are already subject to a highly harmonised supervisory regime and rulebook. Crypto-asset services will be considered to be the main activity of an entity where more than 50% of its total turnover in two consecutive years is generated from the provision of crypto-asset services.
ESMA will also be responsible for conducting market surveillance and the enforcement of the provisions to detect, investigate and sanction market abuse.

The amendment proposes an appropriate transitional period to allow for the smooth transfer of supervisory duties, catering for CASPs already authorised and pending applications still assessed at national level.

How is supervision going to be split between NCAs and ESMA regarding crypto-asset services providers?

There is no split supervision for CASPs. ESMA would be the sole supervisor for CASPs and as such, would exercise all the supervisory powers and be able to take any supervisory measure necessary to carry out its duties, as provided in the ESMA Regulation.

To ensure market integrity and confidence in crypto-asset markets, ESMA would in addition become responsible for the supervision of the MiCAR rules to deter, investigate and sanction market abuse for crypto-assets admitted to trading on crypto-asset trading platforms.

NCA may assist ESMA in carrying out its tasks, and cooperation agreements will continue to be in force, but supervision of crypto-asset service providers will be assigned to ESMA.

National authorities' competence will be limited to the supervision of other regulated entities that provide crypto-asset service pursuant to another existing authorisation (e.g. credit institutions, investment firms, E-money institutions, fund managers) but their main activity is not the provision of crypto-asset services. Finally, there is no change in the current supervisory set-up for credit institutions.