Marsh covers crypto firms for exposures under Europe’s new MiCA rules
Broker Marsh has rolled out an insurance solution for crypto-asset services in Europe ahead of new regulation of the crypto market, due to be introduced in full by the end of this year. MiCAssure covers custodians, exchanges and administrators operating in the European Union that will be regulated under the Markets in Crypto-Assets Regulation, known as MiCA.
The new rules seek to establish legal certainty and address concerns around consumer protection and regulatory fragmentation raised by growth in the crypto-assets and services market. Firms will be required to register and to put in place prudential safeguards, either additional capital or an insurance policy, to cover specific risks.
Earlier this week, the bloc’s banking regulator the European Banking Authority (EBA) finalised draft technical standards for MiCA in three sets of regulatory technical standards, including criteria for acquisitions of regulated firms, and one set of final implementing technical standards, which sets out an application template for authorisation.
Marsh Specialty worked with Lloyd’s and London market insurers to develop MiCAssure, which provides cover for third-party claims from misrepresentations of misleading statements, obligations of confidentiality, business interruption, legal and regulatory obligation, and gross negligence in safeguarding clients’ crypto-assets and funds.
Marsh said MiCAssure offers crypto-asset services in Europe protection against the risks detailed in MiCA’s prudential requirements, and will help firms to avoid setting aside capital or reduce the amount of the capital required under the rules to meet their exposures.
Rupert Poland, UK digital asset leader at Marsh Specialty, said: “Regulatory advancements such as MiCA enhance the credibility of the digital asset ecosystem by offering security and stability to retail users and institutions venturing into the digital assets space, while providing robust guidance and frameworks for crypto asset service providers.
“MiCAssure not only offers clients an operational safeguard but also has the potential to free up capital and facilitate growth, making it a vital insurance and risk management solution for crypto-asset service providers operating in the EU.”
MiCA entered into force in June 2023, with consultations and the development of technical standards underway over the 12-18 month framework before the new regime takes effect. The regulation was adopted by the European Commission in February 2024, with provisions relating to asset-referenced tokens applicable from June 2024 followed by a second and final tranche of new rules due to be introduced on 30 December 2024.
