CSSF Circulars: What Crypto Issuers Must Know
CSSF Circulars: What Crypto Issuers Must Know
The CSSF (Luxembourg's financial regulator) has issued a series of new circulars that define essential compliance measures for asset-referenced tokens (ART) and e-money token (EMT) issuers under MiCAR. These rules are crucial to ensure financial stability, governance, and risk management within the crypto sector. Issuers must understand and implement these measures to avoid regulatory issues and ensure long-term operational resilience.
Key Takeaways
Governance & Compliance (25/872 & 25/875)
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Minimum governance standards: ARTs issuers must adopt proportionate governance structures with internal controls and risk management. These must be proportionate to the size and complexity of the issuer.
- Management & Shareholder Suitability: New requirements for management and key shareholders' skills, experience, and reputation.
- Implementation Timeline: Effective from February 2025.
Risk & Recovery Planning (25/873 & 25/876)
- Recovery Plans: Issuers must prepare recovery plans outlining risks, governance, and distress communication strategies. These must be proportionate to the size and complexity of the issuer.
- Redemption Plans: ARTs and EMTs issuers must develop redemption plans for crisis management.
- Coordination with Authorities: Issuers must work with authorities to ensure effective crisis response.
- Implementation Timeline: Effective from February 2025.
Liquidity & Stress Testing (25/874)
- Liquidity Stress Testing: Regular test are required for significant ARTs and EMTs issuers to access liquidity under stress.
- Broader Scope: Testing extends to smaller issuers if mandated by regulators.
- Impacts of Results: Supervisors can impose stricter liquidity requirements based on test outcomes.