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The Two-Class System of Regulation Plaguing Europe

June 26, 2024


Non-custodial crypto asset service providers, often operating in the decentralized finance (DeFi) industry, offer services related to crypto assets without actually taking custody of the assets themselves. These crypto asset service providers represent by now a significant and growing segment of the crypto finance ecosystem, managing around $100bn of locked value according to MiCAR, which aims to introduce a harmonized prudential and business conduct framework for crypto-asset services, defines CAS providers as legal persons or other undertakings engaged in the provision of one or more crypto-asset services to clients on a professional basis. The regulation outlines several types of crypto-asset services, including the operation of trading platforms, custody and administration of crypto-assets, and advice on crypto-assets, among others.