Art. 112 Exercise of supervisory powers and powers to impose penalties | MiCA regulation | MiCA

This article directly supports Article 111, which sets out the framework for administrative penalties.

Where Article 111 establishes the power to impose penalties, Article 112 governs how competent authorities must calibrate those penalties in practice.

It provides a list of factors that authorities must take into account when deciding on the type and level of any administrative penalty or measure, covering elements such as the nature of the infringement, the financial profile of the offending party, any harm caused to third parties, and the impact on retail holders of crypto-assets.

The article also requires competent authorities to cooperate with each other in cross-border cases to avoid duplication and ensure consistency.

Important points:

Competent authorities are required to weigh a broad set of circumstances when determining the type and level of any penalty under Article 111, including intent, financial strength of the offender, and impact on retail holders.
Cooperation of the infringing party with authorities is a relevant factor, though this does not override the obligation to ensure disgorgement of any profits gained or losses avoided.
Competent authorities are required to coordinate closely in cross-border cases to avoid duplication and ensure penalties are effective and consistent.

1. Competent authorities, when determining the type and level of an administrative penalty or other administrative measure to be imposed in accordance with Article 111, shall take into account all relevant circumstances, including, where appropriate:
  1. the gravity and the duration of the infringement;
  2. whether the infringement has been committed intentionally or negligently;
  3. the degree of responsibility of the natural or legal person responsible for the infringement;
  4. the financial strength of the natural or legal person responsible for the infringement, as indicated by the total turnover of the responsible legal person or the annual income and net assets of the responsible natural person;
  5. the importance of the profits gained or losses avoided by the natural or legal person responsible for the infringement, insofar as those can be determined;
  6. the losses for third parties caused by the infringement, insofar as those can be determined;
  7. the level of cooperation of the natural or legal person responsible for the infringement with the competent authority, without prejudice to the need to ensure disgorgement of profits gained or losses avoided by that person;
  8. previous infringements of this Regulation by the natural or legal person responsible for the infringement;
  9. measures taken by the person responsible for the infringement to prevent its repetition;
  10. the impact of the infringement on the interests of holders of crypto-assets and clients of crypto-asset service providers, in particular retail holders.
1. In the exercise of their powers to impose administrative penalties and other administrative measures under Article 111, competent authorities shall cooperate closely to ensure that the exercise of their supervisory and investigative powers, and the administrative penalties and other administrative measures that they impose, are effective and appropriate. They shall coordinate their action in order to avoid duplication and overlaps when exercising their supervisory and investigative powers and when imposing administrative penalties and other administrative measures in cross-border cases.

Article 112 Exercise of supervisory powers and powers to impose penalties

Relevant recitals