Art. 3 Criteria and factors for the purpose of intervention by competent authorities | Intervention powers of authorities | MiCA

Competent authoritiesmeans one or more authorities:designated by each Member State in accordance with Article 93 concerning offerors, persons seeking admission to trading of crypto-assets other than asset-referenced tokens and e-money tokens, issuers of asset-referenced tokens, or crypto-asset service providers;designated by each Member State for the application of Directive 2009/110/EC concerning issuers of e-money tokens; shall take into account the following factors and criteria to determine whether there is a significant investor protection concern or a threat to the orderly functioning and integrity of markets in crypto-assetsmeans a digital representation of a value or of a right that is able to be transferred and stored electronically using distributed ledger technology or similar technology; or to the stability of the whole or part of the financial system within at least one Member State:

the degree of complexity of the crypto-assetmeans a digital representation of a value or of a right that is able to be transferred and stored electronically using distributed ledger technology or similar technology; or the type of activity or practice related to crypto-assetsmeans a digital representation of a value or of a right that is able to be transferred and stored electronically using distributed ledger technology or similar technology; in relation to the type of clientsmeans any natural or legal person to whom a crypto-asset service provider provides crypto-asset services;, as assessed in accordance with point (c), involved in the activity or practice, or to whom the crypto-assetmeans a digital representation of a value or of a right that is able to be transferred and stored electronically using distributed ledger technology or similar technology; is marketed or sold, taking into account, in particular, the following:
1. the degree of transparency of costs and charges associated with the crypto-assetmeans a digital representation of a value or of a right that is able to be transferred and stored electronically using distributed ledger technology or similar technology;, the activity or practice related to crypto-assetsmeans a digital representation of a value or of a right that is able to be transferred and stored electronically using distributed ledger technology or similar technology;, and, in particular, the lack of transparency resulting from multiple layers of costs and charges;
2. the nature and scale of any risks;
3. the size and robustness of the reserve of assetsmeans the basket of reserve assets securing the claim against the issuer; as further specified by the regulatory technical standards issued pursuant to Article 36(4) of Regulation (EU) 2023/1114;
4. whether the crypto-assetmeans a digital representation of a value or of a right that is able to be transferred and stored electronically using distributed ledger technology or similar technology; or service is bundled with other products or services;
5. the complexity of any terms and conditions;
the size of potential detrimental consequences, considering in particular, the following:
1. the notional value of the crypto-assetmeans a digital representation of a value or of a right that is able to be transferred and stored electronically using distributed ledger technology or similar technology;;
2. the number of clientsmeans any natural or legal person to whom a crypto-asset service provider provides crypto-asset services;, token holders or market participants involved;
3. the relative share of the product in investors’ portfolios;
4. the probability, scale and nature of any detriment, including the amount of loss potentially suffered;
5. the anticipated duration of the detrimental consequences;
6. the volume of the issuance;
7. the number of intermediaries involved;
8. the growth of the market or sales;
9. the average amount invested by each clientmeans any natural or legal person to whom a crypto-asset service provider provides crypto-asset services; in the crypto-assetmeans a digital representation of a value or of a right that is able to be transferred and stored electronically using distributed ledger technology or similar technology;;
the type of clientsmeans any natural or legal person to whom a crypto-asset service provider provides crypto-asset services; involved in an activity or practice related to crypto-assetsmeans a digital representation of a value or of a right that is able to be transferred and stored electronically using distributed ledger technology or similar technology; or to whom a crypto-assetmeans a digital representation of a value or of a right that is able to be transferred and stored electronically using distributed ledger technology or similar technology; is marketed or sold, taking into account, in particular, the following:
1. whether the clientmeans any natural or legal person to whom a crypto-asset service provider provides crypto-asset services; is a retail holdermeans any natural person who is acting for purposes which are outside that person’s trade, business, craft or profession; or a qualified investor;
2. clientsmeans any natural or legal person to whom a crypto-asset service provider provides crypto-asset services;’ skills and abilities, including the level of education, experience with similar crypto-assetsmeans a digital representation of a value or of a right that is able to be transferred and stored electronically using distributed ledger technology or similar technology; or selling practices;
3. clientsmeans any natural or legal person to whom a crypto-asset service provider provides crypto-asset services;’ economic situation, including their income and wealth;
4. clientsmeans any natural or legal person to whom a crypto-asset service provider provides crypto-asset services;’ core financial objectives, including pension saving and home ownership financing;
the degree of transparency of the crypto-assetmeans a digital representation of a value or of a right that is able to be transferred and stored electronically using distributed ledger technology or similar technology; or the type of activity or practice related to crypto-assetsmeans a digital representation of a value or of a right that is able to be transferred and stored electronically using distributed ledger technology or similar technology;, taking into account, in particular, the following:
1. any hidden costs and charges;
2. the use of techniques drawing clientsmeans any natural or legal person to whom a crypto-asset service provider provides crypto-asset services;’ attention but not necessarily reflecting the suitability or overall quality of the product or service;
3. the nature of risks and transparency of risks;
4. the use of product names or terminology or other information that is misleading by implying a greater level of security or return than those which are actually possible or likely, or which imply product features that do not exist;
5. the use of unfair, unclear or misleading information in communications;
the particular features or components of the crypto-assetmeans a digital representation of a value or of a right that is able to be transferred and stored electronically using distributed ledger technology or similar technology; or the activity or practice related to crypto-assetsmeans a digital representation of a value or of a right that is able to be transferred and stored electronically using distributed ledger technology or similar technology;;
the existence and degree of disparity between the expected return or profit for investors and the risk of loss in relation to the crypto-assetmeans a digital representation of a value or of a right that is able to be transferred and stored electronically using distributed ledger technology or similar technology; or the activity or practise related to crypto-assetsmeans a digital representation of a value or of a right that is able to be transferred and stored electronically using distributed ledger technology or similar technology;, taking into account, in particular, the following:
1. the structuring costs of such crypto-assetsmeans a digital representation of a value or of a right that is able to be transferred and stored electronically using distributed ledger technology or similar technology;, activity or practice and other costs;
2. the disparity in relation to the issuermeans a natural or legal person, or other undertaking, who issues crypto-assets;’s risk retained by the issuermeans a natural or legal person, or other undertaking, who issues crypto-assets;;
3. the risk/return profile or risk or benefit profile;
the costs and ease with which investors are able to sell the relevant crypto-assetmeans a digital representation of a value or of a right that is able to be transferred and stored electronically using distributed ledger technology or similar technology; or switch to another crypto-assetmeans a digital representation of a value or of a right that is able to be transferred and stored electronically using distributed ledger technology or similar technology;, taking into account, in particular, he following:
1. the bid or ask spread;
2. the degree of liquidity in the market for crypto-assetsmeans a digital representation of a value or of a right that is able to be transferred and stored electronically using distributed ledger technology or similar technology;;
3. the frequency of trading availability;
4. the issuance size and size of the secondary market;
5. the presence or absence of liquidity providers or secondary market makers;
6. the features of the trading system;
7. any other barriers to exit;
the pricing and associated costs of the crypto-assetmeans a digital representation of a value or of a right that is able to be transferred and stored electronically using distributed ledger technology or similar technology; or the activity or practice related to crypto-assetsmeans a digital representation of a value or of a right that is able to be transferred and stored electronically using distributed ledger technology or similar technology;, taking into account, in particular, either of the following:
1. the use of hidden or secondary charges;
2. charges that do not reflect the level of service provided;
the selling practices associated with the crypto-assetmeans a digital representation of a value or of a right that is able to be transferred and stored electronically using distributed ledger technology or similar technology;, taking into account, in particular, the following:
1. the communication and distribution channels used;
2. the information, marketing or other promotional material associated with the investment;
3. the assumed investment purposes;
4. whether the decision to buy is secondary or tertiary following an earlier purchase;
the financial and business situation of the issuermeans a natural or legal person, or other undertaking, who issues crypto-assets; or the service provider of a crypto-assetmeans a digital representation of a value or of a right that is able to be transferred and stored electronically using distributed ledger technology or similar technology;, taking into account, in particular, either of the following:
1. the financial situation of the issuermeans a natural or legal person, or other undertaking, who issues crypto-assets; or the service provider of a crypto-assetmeans a digital representation of a value or of a right that is able to be transferred and stored electronically using distributed ledger technology or similar technology;;
2. the transparency of the business situation of the issuermeans a natural or legal person, or other undertaking, who issues crypto-assets; or the service provider of a crypto-assetmeans a digital representation of a value or of a right that is able to be transferred and stored electronically using distributed ledger technology or similar technology;;
whether there is insufficient or unreliable information about a crypto-assetmeans a digital representation of a value or of a right that is able to be transferred and stored electronically using distributed ledger technology or similar technology;, provided either by the issuermeans a natural or legal person, or other undertaking, who issues crypto-assets; or the offerormeans a natural or legal person, or other undertaking, or the issuer, who offers crypto-assets to the public; or service provider, to enable market participants at whom it is targeted to make an informed decision, taking into account the nature and type of the crypto-assetmeans a digital representation of a value or of a right that is able to be transferred and stored electronically using distributed ledger technology or similar technology;;
whether the crypto-assetmeans a digital representation of a value or of a right that is able to be transferred and stored electronically using distributed ledger technology or similar technology; or the activity or practice related to crypto-assetsmeans a digital representation of a value or of a right that is able to be transferred and stored electronically using distributed ledger technology or similar technology; poses a high risk to the performance of transactions entered into by participants or investors in the relevant market;
whether the activity or practice related to crypto-assetsmeans a digital representation of a value or of a right that is able to be transferred and stored electronically using distributed ledger technology or similar technology; would significantly compromise the integrity of the price formation process in the market concerned such that the price or value of the crypto-assetmeans a digital representation of a value or of a right that is able to be transferred and stored electronically using distributed ledger technology or similar technology; in question is no longer determined according to legitimate market forces of supply and demand, or such that market participants are no longer able to rely on the prices formed in that market or in the volumes of trading as a basis for their investment decisions;
whether the crypto-assetmeans a digital representation of a value or of a right that is able to be transferred and stored electronically using distributed ledger technology or similar technology; or the activity or practice related to crypto-assetsmeans a digital representation of a value or of a right that is able to be transferred and stored electronically using distributed ledger technology or similar technology; would leave the national economy vulnerable to risks;
whether the characteristics of a crypto-assetmeans a digital representation of a value or of a right that is able to be transferred and stored electronically using distributed ledger technology or similar technology; make it particularly susceptible to being used for the purposes of financial crime and, in particular whether the characteristics could potentially encourage the use of the crypto-assetmeans a digital representation of a value or of a right that is able to be transferred and stored electronically using distributed ledger technology or similar technology; for the following:
1. any fraud or dishonesty;
2. misconduct in, or misuse of information, in relation to a financial market;
3. handling the proceeds of crime;
4. the financing of terrorism;
5. facilitating money laundering;
whether a crypto-assetmeans a digital representation of a value or of a right that is able to be transferred and stored electronically using distributed ledger technology or similar technology; or the activity or practice related to crypto-assetsmeans a digital representation of a value or of a right that is able to be transferred and stored electronically using distributed ledger technology or similar technology; poses a particularly high risk to the resilience or smooth operation of markets and their infrastructure;
whether the crypto-assetmeans a digital representation of a value or of a right that is able to be transferred and stored electronically using distributed ledger technology or similar technology; or the activity or practice related to crypto-assetsmeans a digital representation of a value or of a right that is able to be transferred and stored electronically using distributed ledger technology or similar technology; poses a high risk of disruption to financial institutions deemed to be important to the financial system of the Member State of the relevant competent authoritymeans one or more authorities:designated by each Member State in accordance with Article 93 concerning offerors, persons seeking admission to trading of crypto-assets other than asset-referenced tokens and e-money tokens, issuers of asset-referenced tokens, or crypto-asset service providers;designated by each Member State for the application of Directive 2009/110/EC concerning issuers of e-money tokens;;
the relevance of the distribution of the crypto-assetmeans a digital representation of a value or of a right that is able to be transferred and stored electronically using distributed ledger technology or similar technology; as a funding source for the issuermeans a natural or legal person, or other undertaking, who issues crypto-assets;;
whether a crypto-assetmeans a digital representation of a value or of a right that is able to be transferred and stored electronically using distributed ledger technology or similar technology; or an activity or practice related to crypto-assetsmeans a digital representation of a value or of a right that is able to be transferred and stored electronically using distributed ledger technology or similar technology; poses risks to the market or payment systems infrastructure, including trading, clearing and settlement systems;
whether a crypto-assetmeans a digital representation of a value or of a right that is able to be transferred and stored electronically using distributed ledger technology or similar technology; or an activity or practice related to crypto-assetsmeans a digital representation of a value or of a right that is able to be transferred and stored electronically using distributed ledger technology or similar technology; could threaten investors’ confidence in the financial system.