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The lack of uniform rules has created uncertainty for both investors and service providers. This is why the EU has adopted the Markets in Crypto-Assets Regulation (MiCA,) which brings the first comprehensive regulatory framework for the cryptoasset sector in the EU.
Pre-MiCA Regulation
In Slovakia, the provision of cryptoasset services was governed by the Trade Licensing Act, which was not adapted to the specificities of digital assets. The Slovak legal system knew only two tied trades related to cryptoassets hardly covering all possible relationships regarding cryptoassets, namely:
provision of virtual currency exchange services - this activity was performed by persons who operated a centralised or decentralised virtual currency exchange as part of his business activity;provision of virtual currency wallet services - this service was provided by persons who provided the protection of private cryptographic keys, facilitating the holding, storage and transfer of virtual currency for clients.
Providers had to meet the general conditions for operating a trade, namely attaining the age of 18, legal capacity and clean record. In addition to these basic requirements only a full general secondary education or a full secondary vocational education was required.
Obtaining a trade licence was easy and involved only low administrative fees – 22 EUR or 11 EUR in the case of e-filing for each tied trade.
However, providers also had to comply with the obligations under the Act on the Protection against the Legalisation of Proceeds from Crime and on the Protection against the Financing of Terrorism, that is, to draw up a programme of their own activities, to carry out a thorough identification of their clients and to report any unusual business operations to the Financial Intelligence Unit.
Providers authorised to provide services based on a trade licence may provide them until 30.12.2025 at the latest. After that date, only those providers holding a licence under the MiCA will be allowed to carry out the activity in question.
Post-MiCA Regulation
From 30.12.2024, the MiCA fundamentally changes the rules. Cryptoasset service providers need to be authorized by the National Bank of Slovakia (NBS) or the relevant foreign supervisory authority, and there must be a thorough specification of cryptoasset related activities, which are:
providing custody and administration of cryptoassets on behalf of clients: the safekeeping or controlling, on behalf of clients, of crypto-assets or of the means of access to such crypto-assets, where applicable in the form of private cryptographic keys;operation of a trading platform for cryptoassets: the management of one or more multilateral systems, which bring together or facilitate the bringing together of multiple third-party purchasing and selling interests in crypto-assets, in the system and in accordance with its rules, in a way that results in a contract, either by exchanging crypto-assets for funds or by the exchange of crypto-assets for other crypto-assets;exchange of cryptoassets for funds: the conclusion of purchase or sale contracts concerning crypto-assets with clients for funds by using proprietary capital;exchange of cryptoassets for other cryptoassets: the conclusion of purchase or sale contracts concerning crypto-assets with clients for other crypto-assets by using proprietary capital;execution of orders for cryptoassets on behalf of clients: the conclusion of agreements, on behalf of clients, to purchase or sell one or more crypto-assets or subscription on behalf of clients for one or more crypto-assets, and includes the conclusion of contracts to sell crypto-assets at the moment of their offer to the public or admission to trading;placing of cryptoassets: the marketing, on behalf of or for the account of the offeror or a party related to the offeror, of crypto-assets to purchasers;receipt and transmission of orders for cryptoassets on behalf of clients: the reception from a person of an order to purchase or sell one or more crypto-assets or to subscribe for one or more crypto-assets and the transmission of that order to a third party for execution;providing advice on cryptoassets: offering, giving or agreeing to give personalised recommendations to a client, either at the client’s request or on the initiative of the crypto-asset service provider providing the advice, in respect of one or more transactions relating to crypto-assets, or the use of crypto-asset services;providing portfolio management on cryptoassets: managing portfolios in accordance with mandates given by clients on a discretionary client-by-client basis where such portfolios include one or more crypto-assets;providing transfer services for cryptoassets on behalf of clients: providing services of transfer, on behalf of a natural or legal person, of crypto-assets from one distributed ledger address or account to another.
Providers have to comply with often very demanding requirements, namely requirements for individual cryptoasset services, data transmission for cryptoasset transfers, IT security, consumer protection, staffing requirements, capital requirements, and AML requirements. Licensing conditions must be always complied with, and the NBS also requires regular reporting from supervised entities.
The administrative fee for a licence varies depending on the specific service and/or the number of services, ranging from 1 700 EUR to 2 500 EUR. In addition to this application fee, providers are required to pay the NBS an annual supervision fee calculated as 0.1 % of the contributor's assets, but not less than 1 000 EUR.
MiCA ends the period of minimal regulation and brings new clear rules for the whole sector, greater transparency and security. While some smaller entities may struggle to comply, the EU cryptoasset market is entering a new, more trusted era.
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