What Are the Key Custody Requirements Proposed under the EU’s MiCA Regulation?
The EU's Markets in Crypto-Assets (MiCA) regulation proposes stringent custody requirements for Crypto Asset Service Providers (CASPs). These include the obligation to act honestly, fairly, and professionally in the best interest of clients.
CASPs must maintain clear asset segregation, implement robust security policies, and have sufficient prudential safeguards (capital requirements) to cover potential risks. They must also have a clear return policy for client assets.
Glossar
Custody Requirements for Crypto
Requirement ⎊ Custody requirements for crypto delineate the mandated standards for the secure storage and control of digital assets, particularly those used as collateral in derivatives trading.
Prudential Safeguards
Requirement ⎊ Prudential Safeguards are the mandatory regulatory Requirement standards imposed on financial institutions, including crypto derivatives platforms and custodians, designed to ensure their financial soundness and operational stability.
Mica Regulation
Regulatory Framework ⎊ Mica Regulation refers to the comprehensive legislative act passed by the European Union establishing a harmonized regulatory framework for crypto-assets not already covered by existing financial services legislation, such as MiFID II.
Custody Requirements
Framework ⎊ Within cryptocurrency, options trading, and financial derivatives, a robust custodial framework establishes the foundational principles governing the safeguarding of assets.