Adapting to the Changing Crypto-Asset Regulatory Landscape in the EU: An Update from CoinGate

As you may have heard, the European Union (EU) is setting the stage for the implementation of its new Crypto-Asset Regulatory Framework by the end of 2024. 

At CoinGate, we understand the importance of these regulatory changes, and as such, we are committed to keeping our valued customers abreast with our plans for compliance.

The two key pieces of legislation driving these changes are the Markets in Crypto-Assets regulation (MiCA) and the Transfer of Funds Regulation (TRF). 

Both apply across the EU and will come into effect over the next 12 to 18 months.

Understanding MiCA

The purpose of MiCA is to establish rules for crypto-asset market participants, such as ourselves, to promote consumer protection and enhance market confidence. The regulation encompasses a range of services that fall under the category of ‘crypto-asset service’.

To ensure our compliance with MiCA, we will undertake several adjustments within our operations, support, development, and core teams. 

We are also establishing new policies and enhancing our ICT systems for security and resilience. Moreover, we will be keeping an electronic record of our clients’ account statuses and sending notifications every three months.

Interestingly, MiCA exempts certain assets such as non-fungible tokens (NFTs), Decentralized Autonomous Organizations (DAOs), and independent blockchain-operating coins like Bitcoin, Litecoin, and ZCash.

While these adjustments signify considerable changes, they also provide significant benefits to CoinGate and our customers. We will be recognized as a financial institution, enabling us to operate and market our services more effectively within the EU. In addition, we’ll be able to store our funds in the Central Bank and will have oversight from this institution.

Complying with TRF

Please note that the following information only applies to external crypto payments made from CoinGate to other Crypto-Assets service providers. This includes refunds to crypto wallets overseen by these providers or self-hosted wallets.

The Transfer of Funds Regulation (TRF) is primarily aimed at payment service providers and crypto-asset providers like us. Its primary goal is to enhance transparency and prevent illicit activities by collecting more detailed information about transactions and their participants.

To ensure compliance with the TRF, we will gather more information about each transaction, including the shopper’s name, surname, Distributed Ledger Technology (DLT) address, country, address, ID document, and details to identify the beneficiary.

In cases where transactions involve self-hosted wallets and exceed 1,000 EUR, we will be required to verify the ownership of the wallet. If the required information is missing or incomplete, we may reject the transfer or return the transferred crypto-assets to the originator’s crypto-asset account.

Big Changes – Good or Bad?

As we adapt to these changes, our primary goal remains the same: to provide you, our esteemed customers, with the best crypto-asset services while upholding the highest standards of safety and security. We believe these regulatory changes will further strengthen the trust you have in us and help pave the way for a more secure and regulated crypto market.

We will keep you updated on our progress as we navigate this changing landscape. Thank you for your continued support and understanding.