80% of crypto companies ignore this crucial deadline!

3h00 ▪ 4 min reading ▪ by Luc Jose A.

The MiCA Regulation imposes new environmental sustainability disclosure obligations for crypto companies in Europe. However, many entities appear to be misinterpreting the deadlines, which could result in significant regulatory consequences.

Crypto Companies’ Confusion Over Disclosure Deadlines

Many crypto companies within the European Union appear to ignore the deadlines imposed for the disclosure of information on sustainable development, despite clarifications provided by regulators. According to Tim Zölitz, Chief Risk Officer at Crypto Risk Metrics, a large majority of crypto asset service providers are unaware that ESG (Environmental, Social and Governance) data disclosure is due to begin on January 1, 2025. This confusion could come from a misinterpretation of the regulations, where some wrongly believe that transparency obligations only come into force with the publication of white papers on crypto-assets, scheduled for 2027.

Despite clarifications from the European Securities and Markets Authority (ESMA), many of these entities are still unaware of the exact requirements. Crypto Risk Metrics recently signed a memorandum of understanding with the Digital Token Identifier (DTI) Foundation to collaborate on displaying ESG data. This initiative aims to improve transparency and help crypto asset service providers comply with new regulations. However, the environmental impact of crypto activities, particularly mining, remains a major concern, likely to hinder wider adoption of these assets. The industry must adapt quickly to avoid possible sanctions and promote sustainable growth.

Clarifications and consequences

The MiCA rules, established to regulate the crypto asset market in Europe, impose strict requirements on environmental transparency. According to the guidelines, issuers of asset-referenced tokens (ART) and electronic money tokens (EMT) must begin disclosing their environmental impacts by June 30, 2024. Additionally, all service providers of Crypto assets must comply with ESG disclosure requirements by the end. of the year. However, this obligation has often been misunderstood, with some in the industry mistakenly believing that these disclosures were only required with the publication of white papers, scheduled for 2027.

This misinterpretation has its origins in part in the initial wording of MiCA, which was subsequently clarified by the European Securities and Markets Authority (ESMA). In a consultation document, ESMA clarified that information on environmental impacts must be published on entities’ websites, independently of white papers. This clarification aims to eliminate any ambiguity, but there remain gray areas.

Exchange platform operators must also ensure that this information is accessible in a clear and visible manner. Failure to comply could not only result in regulatory sanctions, but also tarnish the reputation of crypto companies, thereby hindering the adoption of these assets by large companies. institutional investors who are concerned about the environment.

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Luc José A.

A graduate of Sciences Po Toulouse and holder of a blockchain consultant certification issued by Alyra, I joined the Cointribune adventure in 2019. Convinced of the potential of blockchain to transform many sectors of the economy, I took the commitment to raise awareness and inform the general public about this constantly evolving ecosystem. My goal is to enable everyone to better understand blockchain and seize the opportunities it offers. I strive every day to provide an objective analysis of current events, to decipher market trends, to relay the latest technological innovations and to put into perspective the economic and societal issues of this ongoing revolution.

DISCLAIMER

The views, thoughts and opinions expressed in this article belong solely to the author and should not be considered investment advice. Do your own research before making any investment decisions.

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