Originally published in Waters Technology
The Markets in Crypto-Assets (Mica) regulation came into force across the European Union on June 29 to enhance the transparency and integrity of the industry’s burgeoning crypto markets. Travis Schwab, CEO of Eventus, discusses his firm’s Mica strategy and the enabling role it plays in helping its clients comply with the regulation’s central tenets.
While the Mica regulation has been on the EU’s statute books since April 2023, its rules only came into effect in mid-2024. What do you see as the central tenets of the regulation from Eventus’ perspective and why?
Travis Schwab: At its core, the fundamental aim of Mica is to bolster investors’ trust and promote market integrity by bringing digital assets in line with other asset classes. While the scope of the regulation is wide-ranging and details various requirements spanning licensing and registration, supervision, anti-money laundering and know your customer, Eventus’ primary focus is to help firms comply with the rules and obligations for monitoring, detecting and preventing market abuse, which have largely been extended and adapted from traditional financial markets.
Markets rarely become less regulated, so the broader implications for crypto firms worldwide are significant. Mica offers a comprehensive regulatory framework that will likely be replicated in other jurisdictions such as the US, where the user community has been clamoring for more clarity for years. This gives crypto firms not currently subject to Mica an opportunity to take a proactive approach and get ahead of anticipated future mandates, establishing market leadership as a result.
What do you foresee as the technological and operational implications for firms under Mica’s purview? What do these firms need to be aware of and how is Eventus helping them?
Travis Schwab: In recent years, crypto firms have made progress in advancing surveillance and monitoring activities to detect market abuse, but Mica now means they have actual regulations to comply with, compared to “best practices”. Specific rules and procedures need to be in place and followed daily—and there could be painful and existential implications for those who fall short.
Naturally, this focuses minds and will require fundamental changes to day-to-day operations, as well as refinements and upgrades to existing surveillance systems, or the implementation of new ones.
While traditional firms continue to refine and optimize their organisations, for native crypto firms the operational lift will be far more acute. This is one of their first experiences of complying with a wide-ranging, major piece of financial legislation, so the learning curve is steep. Only 9% of firms expecting to be covered by Mica are ready to go, recent research reveals. And 25% have not yet begun preparations.
In view of this industry readiness (or lack of it), Eventus is helping firms understand and meet the specific Mica requirements to prevent market abuse and manipulation. This stands to accelerate as we head into 2025, which marks the final deadline for full compliance with the entire regulatory framework.
What are your clients’ most acute challenges in complying with Mica?
Travis Schwab: The good news is that many of our clients are reporting they are well-positioned to handle their Mica obligations. Across the industry more broadly, however, the challenges reflect an age-old truism: that compliance is both a science and an art.
The science lies in the tech. Firms must ensure their surveillance platforms are flexible—rooted in actionable, scalable, real-time data—and battle-tested in the most complex and high-volume environments.
The art is born from the deep expertise and hard-won experience of practitioners and regulatory experts who have seen it all before. This unlocks the capacity to tailor tech implementations to address regulatory demands, while aligning with the unique risk and operational requirements of individual firms.
The art is born from the deep expertise and hard-won experience of practitioners and regulatory experts who have seen it all before. This unlocks the capacity to tailor tech implementations to address regulatory demands, while aligning with the unique risk and operational requirements of individual firms.
Yet finding this expertise is a major roadblock, with an industry survey revealing that 73% of firms working to establish Mica-compliant surveillance systems report securing skilled surveillance staff as being a challenge. For this reason, compliance teams are seeking trusted partners with whom they can work collaboratively to help navigate the complexities of Mica.
What is Eventus’ unique offering when it comes to helping firms comply with Mica’s requirements? What do you bring to the table that separates you from other technology providers serving the digital/crypto assets market?
Travis Schwab: While Mica signals increasing regulatory alignment between traditional finance and digital assets, fundamental differences remain. With established roots in traditional markets, coupled with the insight gained from working with the world’s largest crypto venues since 2018, Eventus is uniquely positioned to help firms understand the nuances and bridge the gap.
Firms also benefit from the power of community. Our offering is directly shaped by the collective experiences of more than 120 clients worldwide. This true partnership approach is the driving force of innovation at Eventus, informing the ongoing development of our industry-leading, award-winning trade surveillance platform—Validus—and underpinning our responsive support.
As Mica comes into force, and with regulators eyeing similar frameworks for other jurisdictions, crypto firms will be empowered to take control of their compliance.