The majority of the Markets in Crypto-Assets Regulation (‘MiCAR’) entered into force on 30 December 2024. MiCAR requires crypto-asset service providers (‘CASPs’) to comply with various requirements, which we discussed over the course of our previous three blogs on MiCAR: Part I, Part II, and Part III.

However, there is still much to uncover for both EU and non-EU based CASPs. This was also indicated by the European Securities and Markets Authority (‘ESMA’) in its final report on the guidelines on reverse solicitation under the Markets in Crypto Assets Regulation’ (the ‘Guidelines') on 17 December 2024. In this blog, we will discuss the following:

1. reverse solicitation under MiCAR;
2. content of the Guidelines, and
3. what is next?

1.      Reverse solicitation under MiCAR

With the introduction of MiCAR, authorised CASPs and certain financial entities may provide crypto-asset services in the EU. Specific conditions and limitations as to which services may be provided can apply depending on the facts. Additionally, Dutch CASPs may continue to offer their services in the Netherlands based on their registration with the Dutch Central Bank (De Nederlandsche Bank) up until 30 June 2025. After 30 June, a license is required.

Since only firms with a registered office in the EU can be authorised as CASPs, third-country firms are in principle prohibited from providing crypto-asset services in the EU.

However, MiCAR introduces the possibility for non-EU firms to offer crypto assets services to EU-clients without a MiCAR-license. This is subject to the condition that the service is initiated by the client’s own and exclusive request. ‘Exclusive initiative’ means that the non-EU firm has not solicited clients in the Member State of the client prior to their request. ESMA confirms that this exemption should be understood ‘very narrowly’ and cannot be used to circumvent MiCAR. The client must initiate the services by making a specific request to the firm. The incentive to initiate the request should not be influenced through marketing or publications intended to attract EU clients.

If the aforementioned condition of reverse solicitation is met, the non-EU firm can provide that crypto-asset service or activity specifically requested by the client in the EU. Additionally, the firm may offer crypto-asset services of the same type as originally requested.

2.      Content of the Guidelines

Solely based on the MiCAR provision concerning reverse solicitation, it remains unclear in what circumstances a firm is deemed to solicit a client and in what circumstances solicitation is considered to be reversed. The limitations of ‘same-type of crypto assets or services’ remain unclear as well. To clarify both elements, the Guidelines have been issued. Following the structure of the Guidelines, we will discuss:

1. the means of solicitation;
2. the person soliciting;
3. the exclusive initiative, and
4. the same-type of crypto-assets or services.

i. Means of solicitation

Solicitation, being the promotion, advertisement and otherwise offering of services or assets, can be carried out through a broad spectrum of means. If a firm publishes press releases, sets up phone calls, or releases commercials, towards (prospective) clients in the EU, this qualifies as solicitation by the firm.

There can be more ambiguous situations, such as sponsoring or attending an event, where either the solicitation itself is not obvious, or EU clients are not solicited exclusively. The Guidelines clarify under which circumstances a firm is likely to solicit clients in the EU. These circumstances include but are not limited to:

• having a website with an EU-country-specific top-level domain or subdomain (such as .nl or .lu);
• using a language which is not customary in the sphere of international finance (such as Dutch) and there is no indication that the firm operates in a country where that language is customary;
• sponsoring an EU- or Member State-centric event, like the European Football Championship or Holland’s Got Talent. Additionally, sponsoring non-EU centric events, such as the Olympic Games, without taking precautionary measures is also deemed solicitation of EU clients;
• speaking or providing materials at an educational event like a seminar. This can be considered solicitation if it extends beyond purely educational circumstances. Directing the attendees to the firm’s website or handing out brochures is considered going beyond educational purposes.

Non-EU firms can take precautionary measures to ensure they do not solicit clients in the EU and breach the authorisation requirements under MiCAR. Firms can, for instance, geo-block access to the firm’s website, make their mobile app unavailable in a member state’s app store, or refrain from taking in EU-based clients altogether.

ii. Person soliciting

Not only a firm or its employees can solicit, but also persons acting on their behalf or with close links to the firm can carry out the solicitation. The following can be regarded as solicitation of (prospective) EU clients on behalf of the non-EU firm:

• using an EU-licensed entity, such as a payment institution or investment firm, to promote the non-EU firm. Examples include display of the firm’s logo on the entity’s website or referral to the firm by the EU-licensed entity; or
• having an influencer or content creator promote the non-EU firm’s crypto-assets, services or profile on social media.

Any form of renumeration for the promotional activities is a strong indication that a licensed entity or finfluencer is affiliated to the firm. If the firm has no prior knowledge of the promotion, and has not consented, encouraged or otherwise facilitated it, ESMA does not consider it solicitation on behalf of the firm.

iii. Exclusive initiative

While the two previous circumstances are to be interpreted broadly, the condition of the client’s own exclusive initiative should be construed narrowly. Determining that the client has requested the crypto-assets or services is always factual and cannot be assumed by contractual provisions or disclaimers.

Furthermore, once a client has solicited a firm at its own exclusive request, the condition above remains applicable. Tempting the existing client to start a new transaction one month later is considered to be solicitation by the firm and thus in breach of the authorisation requirement. The firm is, however, allowed to offer the same type of crypto-asset or service, as long as it is in the context of the transaction initiated by the client.

iv. Crypto-asset services of the same type

The reverse solicitation regime leaves open the possibility to market crypto-assets or services to the client on the condition that they are of the same type as those originally requested. For example, if a non-EU CASP is reverse solicited by a client to provide advice on a utility token, the CASP can do so and, in addition, provide advice on another utility token. The CASP can, however, not provide advice on a different crypto-asset such as an electronic-money token.

Firms should assess on case-by-case basis whether the crypto-assets or services are of the same type, taking into account elements such as the category of crypto-assets and their respective risks. Notwithstanding the firm’s own categorisation of crypto-assets, ESMA considers the following pairs of assets never to be of the same type, and thus not allowed for reverse solicitation:

• utility tokens, asset-referenced tokens (‘ART’) or electronic money tokens (‘EMT’);
• crypto-assets not stored or transferred using the same technology;
• EMT not referencing the same official currency;
• ART based mostly on fiat currencies and ART having significant crypto-currency ponderations;
• liquid and illiquid crypto-assets, relating to the degree to which the crypto can be converted to cash or other assets. Or in other words, whether it can be traded on the open market, and
• crypto-assets other than ART and EMT with a non-identifiable offeror and crypto-assets other than ART and ERT with an identifiable offeror.

Additionally, it is important to note that if a client requests a specific crypto-asset, the firm cannot respond by offering a package of bundled crypto-assets which contains that specific crypto-asset but also other types of crypto-assets.

To illustrate the link between the conditions outlined in (iii) and (iv) above, let us assume that a client reverse solicits a non-EU CASP to buy a euro-referenced EMT. The CASP may then also market another euro-referenced EMT for the client to buy. The CASP may, however, not market a dollar-referenced EMT or an ART, since these are not same-type crypto-assets. The CASP may also not first execute the client’s order and then market the original euro-referenced EMT through a push notification a month later. Even though this is marketing of the same-type crypto-asset, ESMA deems that timing between the original transaction and the marketing causes them to no longer be linked. Therefore, the crypto-asset is not marketed in the context of the original transaction requested by the client and is thus deemed solicitation by the CASP.

3.      What is next?

Last week, the Guidelines were translated into all official EU languages. As from the date of translation, the member states must notify ESMA within two months whether they comply or explain why they take a different approach. Neither the Dutch Authority on Financial Markets (‘AFM’), nor the Luxembourg supervisory authority of the financial sector (the Commission de Surveillance du Secteur Financier, ‘CSSF’) have published a response yet. It is, however, evident that CASPs are on the radar of the AFM, as the supervisor published a report on its website regarding the AFM’s expectations of CASPs’ information disclosures and marketing outings. Similarly, the CSSF in Luxembourg is closely monitoring the implementation of the Guidelines. While the CSSF has not yet published a response, it has actively incorporated previously released MiCAR-related guidelines into its administrative practice and supervisory practices. The Guidelines are therefore likely to follow the same approach. Keep an eye out for our upcoming blog, in which we will keep you updated on this report.