Client's own exclusive initiative: ESMA's consultation on reverse solicitation in MiCA

Provision of crypto-asset services or activities by a third-country firm without licence is strictly limited under MiCA to cases where such service is initiated at the own exclusive initiative of a client (the so called “reverse solicitation” exemption).

Until 29 April 2024, ESMA’s consultation was underway on the draft guidelines for reverse solicitation under MiCA and according to this document, the reverse solicitation exemptions should be understood as very limited and narrowly framed and, consequently, should not be assumed, nor exploited to circumvent MiCA. Facts should prove them, and no contractual arrangements or disclaimers can supersede contrary facts.

The solicitation of clients by third-country firms should be construed broadly and in a technology-neutral way. All facts and circumstances of the case are relevant; for example, a website in an official Union language, which is uncommon in international finance, strongly indicates that a third-country firm is targeting EU clients. Conversely, geo-blocking EU clients suggests non-solicitation. The solicitation happens regardless of who conducts it – whether it's the third-country firm directly, any other person acting on its explicit or implicit behalf, or someone closely linked to it, including so-called influencers.

Article 61(2) of MiCA leaves open the possibility for the third-country firm to market to that client crypto assets or crypto-asset services or activities of the same type. However:

• The requirement that the crypto-asset services be provided based on the client's own exclusive initiative still applies.

  
  

• The offering should be in the context of the original transaction; a month after the client's own exclusive initiative, the third-country firm would not be entitled to market further crypto-asset services or activities of the same type.

  
  

• Records tracking the relationship with the client is required, in particular, to prove whether the client has taken the initiative to receive crypto asset services with respect to a new product.

Finally, ESMA draft guidelines present non-exhaustive list of pairs of crypto-assets which should not be considered as belonging to the same type of crypto-assets for the purpose of the reverse solicitation exemption. ESMA will consider the feedback received to this consultation and expect to publish a final report by the end of 2024 at the latest.