In this act Article 3 of 4
Article 3 — Criteria and factors for the purpose of intervention by competent authorities
Financial servicesLevel 2Delegated RegulationMiCAIn forceOfficial source
Competent authorities shall take into account the following factors and criteria to determine whether there is a significant investor protection concern or a threat to the orderly functioning and integrity of markets in crypto-assets or to the stability of the whole or part of the financial system within at least one Member State:
3(a)
a)the degree of complexity of the crypto-asset or the type of activity or practice related to crypto-assets in relation to the type of clients, as assessed in accordance with point (c), involved in the activity or practice, or to whom the crypto-asset is marketed or sold, taking into account, in particular, the following:
Copy link3(a)(i)
i)the degree of transparency of costs and charges associated with the crypto-asset, the activity or practice related to crypto-assets, and, in particular, the lack of transparency resulting from multiple layers of costs and charges;
Copy link3(a)(iii)
iii)the size and robustness of the reserve of assets as further specified by the regulatory technical standards issued pursuant to Article 36(4) of Regulation (EU) 2023/1114;
Copy link3(b)
b)the size of potential detrimental consequences, considering in particular, the following:
Copy link3(b)(iv)
iv)the probability, scale and nature of any detriment, including the amount of loss potentially suffered;
Copy link3(c)
c)the type of clients involved in an activity or practice related to crypto-assets or to whom a crypto-asset is marketed or sold, taking into account, in particular, the following:
Copy link3(c)(ii)
ii)clients’ skills and abilities, including the level of education, experience with similar crypto-assets or selling practices;
Copy link3(c)(iv)
iv)clients’ core financial objectives, including pension saving and home ownership financing;
Copy link3(d)
d)the degree of transparency of the crypto-asset or the type of activity or practice related to crypto-assets, taking into account, in particular, the following:
Copy link3(d)(ii)
ii)the use of techniques drawing clients’ attention but not necessarily reflecting the suitability or overall quality of the product or service;
Copy link3(d)(iv)
iv)the use of product names or terminology or other information that is misleading by implying a greater level of security or return than those which are actually possible or likely, or which imply product features that do not exist;
Copy link3(e)
e)the particular features or components of the crypto-asset or the activity or practice related to crypto-assets;
Copy link3(f)
f)the existence and degree of disparity between the expected return or profit for investors and the risk of loss in relation to the crypto-asset or the activity or practise related to crypto-assets, taking into account, in particular, the following:
Copy link3(f)(i)
i)the structuring costs of such crypto-assets, activity or practice and other costs;
Copy link3(g)
g)the costs and ease with which investors are able to sell the relevant crypto-asset or switch to another crypto-asset, taking into account, in particular, he following:
Copy link3(h)
h)the pricing and associated costs of the crypto-asset or the activity or practice related to crypto-assets, taking into account, in particular, either of the following:
Copy link3(i)
i)the selling practices associated with the crypto-asset, taking into account, in particular, the following:
Copy link3(i)(ii)
ii)the information, marketing or other promotional material associated with the investment;
Copy link3(i)(iv)
iv)whether the decision to buy is secondary or tertiary following an earlier purchase;
Copy link3(j)
j)the financial and business situation of the issuer or the service provider of a crypto-asset, taking into account, in particular, either of the following:
Copy link3(j)(ii)
ii)the transparency of the business situation of the issuer or the service provider of a crypto-asset;
Copy link3(k)
k)whether there is insufficient or unreliable information about a crypto-asset, provided either by the issuer or the offeror or service provider, to enable market participants at whom it is targeted to make an informed decision, taking into account the nature and type of the crypto-asset;
Copy link3(l)
l)whether the crypto-asset or the activity or practice related to crypto-assets poses a high risk to the performance of transactions entered into by participants or investors in the relevant market;
Copy link3(m)
m)whether the activity or practice related to crypto-assets would significantly compromise the integrity of the price formation process in the market concerned such that the price or value of the crypto-asset in question is no longer determined according to legitimate market forces of supply and demand, or such that market participants are no longer able to rely on the prices formed in that market or in the volumes of trading as a basis for their investment decisions;
Copy link3(n)
n)whether the crypto-asset or the activity or practice related to crypto-assets would leave the national economy vulnerable to risks;
Copy link3(o)
o)whether the characteristics of a crypto-asset make it particularly susceptible to being used for the purposes of financial crime and, in particular whether the characteristics could potentially encourage the use of the crypto-asset for the following:
Copy link3(p)
p)whether a crypto-asset or the activity or practice related to crypto-assets poses a particularly high risk to the resilience or smooth operation of markets and their infrastructure;
Copy link3(q)
q)whether the crypto-asset or the activity or practice related to crypto-assets poses a high risk of disruption to financial institutions deemed to be important to the financial system of the Member State of the relevant competent authority;
Copy link3(r)
r)the relevance of the distribution of the crypto-asset as a funding source for the issuer;
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