Prohibiting crypto-asset service providers under MiCA : conditions, proof, and practical challenges

Abstract

Recent developments in the EU鈥檚 crypto regulation, particularly France鈥檚 alleged intentionto block passported CASPs authorised in other Member States and transfer supervisionto ESMA , raise key questions about the Markets in Crypto Assets Regulation 鈥檚 (MiCA)enforcement scope鈥攑articularly whether host Member States can lawfully prohibit firmswith EU-wide authorisations under Article 102. This article analyses the strict proofrequirements and practical challenges of implementing these standards, emphasising thatprohibitions must be based on 鈥渃lear and demonstrable grounds鈥� supported by concreteevidence. Ensuring these measures are necessary, proportionate, and coordinated iscrucial, especially given the jurisprudence demanding objective necessity. Clarifying thescope of Article 102 is essential to balance effective supervision with protecting serviceproviders鈥� rights in the integrated EU crypto market. The constitutional relevance of thisissue centres on whether a host Member State can restrict an EU-wide CASPauthorisation under MiCA鈥檚 Article 102 without violating the fundamental EU right to thefree movement of services. Furthermore, any such restriction must adhere to the Rule ofLaw, specifically the principles of necessity, proportionality, and legal certainty, byrequiring prohibitions to be based on clear, demonstrable, and objective evidence. [excerpt]