Crypto assets and crypto asset service providers have characteristics and a risk profile that is substantially different from providers of regulated financial instruments. This justifies a tailored approach to reverse solicitation within MiCA that protects retail investors when investing in a relatively novel asset class without established regulatory protections.
There is an understandable investor protection goal to ensure that EU consumers interact with crypto asset service providers authorised in the EU, since certain third country crypto asset service providers may operate under limited or no regulation. However, we should be realistic that some EU consumers will seek to access products and services provided by firms outside of the EU. The purpose of the reverse solicitation framework is not to ‘prohibit’ such contact, rather it is to determine the circumstances under which it is permitted.
EU investor protection would be reduced if, as a consequence of the broad approach taken in the draft guidelines, well-regulated financial services firms were unable to respond to an EU client request regarding any crypto asset product or service due to the impact on their ability to market their brand or other services to the EU market. The effect would be to push EU consumers towards providers operating with fewer regulatory protections in place. To address this, we recommend that the guidelines establish a clear nexus between brand marketing and a crypto asset service or product.
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