4. Consultation Questions on the National Discretions

Discretion 1 – Public disclosure of inside information Article 88 (3)

Article 88(2) of MiCAR permits issuers, offerors or persons seeking admission to trading of a crypto-asset to delay public disclosure of inside information providing certain conditions are met, such as where disclosure of the information would prejudice the legitimate interest of the issuer, offeror or persons seeking admission to trading, and where the delay in disclosure is not likely to mislead the public.

Article 88 (3) states that when an issuer, offeror or someone seeking admission to trading has delayed the disclosure to the public of inside information, they are obliged to inform the NCA about the delay of disclosure and provide an explanation. The Regulation also contains a discretion to Article 88(3) that allows for Member States to provide that a record of such an explanation is to be provided only upon the request of the NCA.

Discretion 2 – Administrative penalties and other administrative measures Article 111 (1)

Article 111(1) of MiCAR provides a Member State discretion in relation to administrative penalties and other administrative measures. This article allows Member States to provide for NCAs to have the power to take appropriate administrative penalties and other administrative measures in relation to a number of infringements. This discretion relates to Member States not laying down the administrative penalties where the associated infringement is subject to criminal penalties in national law.

Article 111(6) permits Member States to supplement the powers given in 111(2) to (5) and allow Member States to impose higher levels of penalties than those provided for in the Article.

In respect of the criminalising of certain breaches, it is important that an option exists for such matters to be pursued by the Central Bank as administrative breaches ('prescribed contraventions') and for the Central Bank to be able to bring Administrative Sanctions Procedure (ASP) proceedings in respect of such breaches.

Discretion 3 – MiCAR transition period for existing CASPs Article 143

Article 143 provides a transition period for CASPs that are providing their services in accordance with national law prior to MiCAR applicability (29 December 2024). In Ireland, those CASPs will be those firms that have registered as Virtual Asset Service Providers with the Central Bank of Ireland under the European Union’s Fifth Anti-Money Laundering Directive ('5AMLD') by 29 December 2024.

The transition period permits these CASPs to continue to provide services for up to 18 months after the date of application of MiCAR (i.e. to June 2026), or until they are granted or refused an authorisation.

While the default position in MiCAR is that these CASPs can avail of a transition period, the text provides discretion for Member States to either not apply this transition period or to reduce its duration in circumstances where they consider that their national regulatory framework is less strict than that set out in MiCAR. A reduction in the length of the transition period is also envisaged in Recital 114 where Member States that do not currently have strong prudential requirements for CASPs should be permitted to either not apply or reduce the 18 month transition period.

Discretion 4 – Simplified procedure Article 143 (6)

Article 143(6) contains a provision that Member States may apply a simplified procedure for applications submitted between the date of the application of MiCAR (30th December 2024) and 18 months after the date of application of MiCAR (June 2026). This provides an opportunity for NCAs that have an existing crypto-asset regulatory regime to leverage information already gathered, thus simplifying the procedure and potentially shortening the application time.

Under this procedure, the NCA will still need to confirm that all relevant aspects of MiCAR are being complied with.