MiCA's enigma

Did you know that the Enigma machine, a cipher device used extensively by Nazi Germany during World War II, was cracked by Poland, particularly by mathematician Marian Rejewski? This might come as a surprise, especially to some World War II action movie fans, where 🇵🇱 might not be mentioned at all.

So what is MiCA's enigma then? Well, we think that it comes down to the enigmatic (pun intended) recital 22 of MiCA, which provides that MiCA shall not apply where crypto-asset services are provided in a fully decentralized manner without any intermediary.

MiCA does not delve into what "decentralized manner" means, which, considering how DeFi operates, is perfectly understood. Nevertheless, at tau.legal we face questions from founders relating to this, as many times they indeed face the potential problem of being regulated under MiCA. We believe that pursuing decentralization is a goal that we all in crypto should strive for, and in the case of MiCA, that it is worth trying to structure the business and products to limit the risks.

In this sense, breaking the enigma seems to be worth trying. And, just a heads up, at tau.legal we are proudly based in Poland too.