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By Johannes Wirtz, Slawomir Szepietowski, Filip Windak and Rafal Wloczka from international law firm Bird & Bird.

On 29 January 2024, the European Securities and Markets Authority (ESMA) published a Consultation Paper on the Draft Guidelines on the delimitation of crypto assets from financial instruments. This distinction is important, given that MiCAR clearly stipulates that crypto-assets qualifying as financial instruments are not subject to MiCAR, but to the regulation of financial instruments (e.g., MiFID II).

With a view to the differentiation between financial instruments and crypto-assets under MiCAR, this issue is all the more problematic given that MiFID II does not include a one-size-fits-all definition for all types of financial instruments. The concept of "financial instrument" itself is delineated in a list of instruments outlined in Annex I to MiFID II, rather than by a distinct set of conditions and criteria. Moreover, unlike, for example, in the US (which applies the Howey test), EU jurisprudence has not yet dealt with the problem of the nature of financial instruments and their key features.

With this in mind, ESMA has prepared Dra......................

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