Crypto-assets

The CSSF is aware of the attention paid in recent years by the general public and professionals to crypto-assets. These assets exist in the form of tokens issued through distributed ledger technology and can have various characteristics.

Faced with such financial innovations, the CSSF promotes a neutral and prudent regulatory approach.

The CSSF’s message is therefore not limited to a warning but it invites investors to be cautious and recommends that they obtain information on crypto-assets before making any decision. Virtual currencies, for example bitcoin, are a sub-category of crypto-assets and are not suitable due to their volatility for all investor profiles.

It is therefore essential that any investor considering the acquisition of crypto-assets understands the risks they present and the regulatory framework that applies to them. In this regard, virtual assets, which are a type of crypto-assets, are governed in Luxembourg by the Law of 12 November 2004 on the fight against money laundering and terrorist financing (“AML/CFT Law”).

You can find in this section the publications issued by the CSSF on the subject of crypto-assets.

Regulation (EU) 2023/1114 on Markets in Crypto-Assets (“MiCAR”) entered into force on 29 June 2023.

Among the activities within the scope of MiCAR are the activities of offering to the public or seeking admission to trading of asset-referenced tokens (“ART”) and electronic money tokens (“EMT”) and issuing such tokens. These activities are subject to Titles III and IV of MiCAR as of 30 June 2024.

Consumers considering buying a crypto-asset that aims to maintain a stable value by reference to an official currency (an EMT), or right(s) or value(s) or a combination thereof (an ART), should check whether the issue, offer, or admission to trading is carried out in accordance with MiCAR. This information should be signaled clearly in the white paper for the crypto-asset and on the issuer’s/offeror’s/trading platform’s website, and also present in the register of ESMA (when available). Authorisation information may also be verified on the website of the relevant competent authority (in the case of the CSSF such information may be found in the Search Entities registry).

If the issue, offer, or admission to trading of an ART or EMT is not carried out in accordance with MiCAR, consumers should be aware that the safeguards set out in MiCAR (See Title III for ARTs and Title IV for EMTs, including regarding the disclosure of information, redemption, and complaints) do not apply, and consumers should be extremely cautious in acquiring such crypto-assets.

Examples of where the offer to the public in the EU or admission to trading within the EU of an ART or EMT is not in accordance with MiCAR include:

• where an EMT is issued by an entity in the EU that does not hold an authorisation as a credit institution or electronic money institution;
• where an ART is issued by an entity in the EU that is not a credit institution and has not obtained authorisation under MiCAR;
• where an entity who is not the issuer (of the ART or EMT) has not first obtained the written consent of the issuer.

More generally, before acquiring any type of crypto-asset, consumers are reminded to have regard to the things to ‘know and check’ set out in the joint-ESA warning on crypto-assets.