Crypto-assets market abuse and market participants - markets in crypto-assets regulation (MICA)

Abstract

This thesis focuses on the Markets in Crypto-Assets Regulation (MiCA) from the perspective of market abuse and crypto-assets market participants. More specifically, this thesis examines the ways in which the crypto-assets market participants are regulated to to support innovation and promote greater use of crypto-assets and DLTs, as well as to ensure adequate consumer and investor protection and market integrity. The market participants are examined from the perspective of the market abuse provisions in MiCA. Another important objective of this thesis is to highlight the gaps and shortcomings in the market abuse provisions of MiCA.

The legal doctrinal method is applied to highlight how MiCA has achieved its objective of preventing market abuse and to identify any shortcomings or concerns in the legislation as it stands. MiCA seeks to prevent market abuse by regulating market access, activities of market participants, such as issuers of crypto-assets and crypto-asset service providers (CASPs), and by defining what constitutes abuse in the crypto-assets market. The market abuse provisions of MiCA are largely based on the Market Abuse Regulation (MAR), which was developed for traditional financial markets.

The findings demonstrate that the crypto-assets market has unique characteristics compared to traditional financial markets, such as 24-hour trading and global nature. Furthermore, the findings indicate that both market participants and abuse that occurs in the crypto-assets market have specific characteristics that require a deeper understanding of the market to regulate. Applying the insufficient rules mainly developed for traditional financial markets without modifications, combined with a lack of a truly crypto-assets market-specific regulatory framework, can ultimately lead to a decline in market integrity. This thesis concludes that MiCA as such is not sufficient for preventing and detecting abuse in the market, but rather a useful springboard a future regulation on crypto-assets.