AUSTRIA Trends and Developments Contributed by: Oliver Völkel, CERHA HEMPEL
Consequences for third-country CASPs Third-country CASPs which have acquired EU cus - tomers in the past have to adapt to this new interpre - tation of the reverse-solicitation principle. Now that MiCA is fully applicable, even sending a single e-mail to an existing EU customer may prompt EU regulators to initiate proceedings for unauthorised business. And while a CASP may hold the view that fines are of no concern, the possibility that the regulator could pub - lish investor warnings – also known as naming and shaming – should suffice to encourage third-country CASPs to reevaluate their customer information pro - cesses. Global crypto-firms using non-EU execution venues European supervisory authorities are highlighting risks linked to broker-based business models under MiCA, particularly where crypto-firms structure their operations in a way that allows them to keep access to EU clients while limiting the regulatory impact of the framework. This concerns, in particular, crypto- intermediaries that combine brokerage, execution and trading platform services, often spread across differ - ent entities within the same group. In an ESMA Opinion the authority warns that some firms may apply for authorisation in the EU only for brokerage services, while key activities – such as the operation of trading platforms – remain outside the Union. National authorities are therefore expected to closely examine group structures, the actual opera - tional presence in the EU, and how functions are allocated when assessing licence applications and supervising firms. EU-authorised brokers should not be used as gateways for non-EU group entities to tar - get EU clients or systematically route orders to trading venues outside the EU. Supervision will focus in particular on conflicts of inter - est, best-execution obligations, and client protection where brokerage and execution are carried out within the same corporate group, especially if execution takes place outside the EU. Firms must demonstrate real operational substance in the Union, avoid “letter- box” structures, and ensure that outsourcing, order routing, and hedging arrangements do not undermine the objectives of MiCA.
petitive disadvantage compared to third-country firms vis-à-vis EU clients, it is important to actively protect EU-based investors and MiCA-compliant CASPs from undue incursions by non-EU and non-MiCA compli - ant entities. ESMA limits permissible reverse solicitation ESMA highlights that the term solicitation should be construed in the widest possible way. It includes ban - ner advertisements, sponsorship deals, solicitation by any kind of affiliates such as influencers and other celebrities. This broad interpretation of the term solici - tation, especially with respect to online activities and the use of banner advertising, influencers and other celebrities, reflects the fact that crypto-assets and crypto-asset services are essentially offered online. Similarly, a broad interpretation should be given to the person soliciting. It may be the third-country firm or any entity or person on its behalf. The relationship between the third-country firm and the person solic - iting on its behalf does not necessarily need to be a contractual relationship – it may be explicit or implicit. For instance, if a third party is undertaking a marketing campaign or building the third-country firm profile in the EU, then the third-country firm would not be able to claim that no solicitation was involved and would not be able to rely on Article 61 of MiCA. In addition, timing is of the essence when a third- country firm relies on the reverse-solicitation exemp - tion. If the third-country firm meets all the conditions to rely on Article 61 of MiCA, it may only do so for a very short period of time. The third-country firm rely - ing on the exemption is not allowed to subsequently offer the client further crypto-assets or services, even if such crypto-asset or service is of the same type as the one originally requested, unless they are offered in the context of the original transaction. Although the guidelines do not provide any definite time window during which the exemption may be used, the lapse of a month or even a couple of weeks between the provi - sion of the crypto-asset service based on a request made at the exclusive initiative of the client and a sub - sequent offer by the third-country firm would exclude the application of Article 61.
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