Crypto reverse solicitation in the EU under MiCA

The Markets in Crypto Assets Regulation (MiCA) 2023/1114, is the EU’s regulatory framework for crypto-assets which aims to comprehensively address the complex challenges posed by the evolving crypto-asset market. In particular, MiCA requires that an entity must typically be authorised as a crypto-asset service provider and have a registered office in the EU to market and/or provide crypto asset services in the EU.

The exemptions/exclusions to this requirement are limited but MiCA does include a reverse solicitation exemption under certain circumstances and ESMA has published accompanying Guidelines (the Guidelines) to provide guidance in respect of its application. For third country crypto-asset firms looking to access EEA investors, relying on the MiCA reverse solicitation exemption may, at first glance, look attractive from a cost and administrative perspective. However, the exemption  is narrowly drawn and is also the subject of increased regulatory scrutiny across the EU. Reverse solicitation is also commonly referred to as reverse enquiry or passive marketing.

In the following article we take a look at the parameters of reverse solicitation in the EU under MiCA and consider how firms may mitigate their risks if seeking to rely on it.

What is the reverse solicitation exemption under MiCA?

Under MiCA, the provision of crypto-asset services or activities by a third country firm is strictly limited to cases where such activities or services are initiated at the own exclusive initiative of a client in accordance with Article 61 of MiCA (the Reverse Solicitation Exemption).

The Reverse Solicitation Exemption is intended to be understood as very narrowly framed and to be regarded as the exception. In addition, it only applies to third country firms and may not be relied on by EU-based firms to avoid authorisation or notification requirements under MiCA.

Is there any guidance on the reverse solicitation exemption under MiCA?

There is relatively extensive guidance published by ESMA in the Guidelines. Article 61(3) of MiCA mandated ESMA to issue guidelines: i) to specify the situations in which a third country firm is deemed to solicit clients established or situated in the EU; and ii) on supervision practices to detect and prevent circumvention of the Reverse Solicitation Exemption. The purpose of the Guidelines is to provide more clarity to competent authorities and market participants, and particularly third country firms, on the limited situations where the Reverse Solicitation Exemption may be relied upon and not trigger a licensing requirement.

We note, in particular, the following principles stated in the Guidelines and/or as explained in ESMA’s report:

What constitutes solicitation?

•  Guideline 1 covers the means of solicitation and confirms that the solicitation of clients by third country firms should be interpreted broadly, is not limited to direct offers but also refers to promotions or advertisement and is technology-neutral. This may include for example: internet commercials, brochures, telephone calls, emails, banners & pop-ups, face-to-face meetings, press releases, participations in roadshows and trade fairs, invitations to events, affiliation campaigns, retargeting of advertising, invitations to fill in a response form or to follow a training course, messaging platforms and sponsorship deals. Promotions, advertisements, marketing and offers of a general nature such as brand advertisements, and which are addressed to the public (with a broad and large reach), may also constitute solicitation. Purely educational events or those focused on sharing knowledge or innovations may not be considered solicitation.

•  When considering what constitutes solicitation, competent authorities should consider all facts and circumstances of the case.

•  The annex to the Guidelines provides a list of non-exhaustive examples of what may constitute solicitation of EU clients by third country firms. Some examples include where a third country firm: 

  •  uses regional- or country-specific search engine optimisation strategies or geo-targeting strategies for running digital ads; or

  • has a website or part of a website in an official language of the EU which is not customary in the sphere of international finance, or integrated translation tools on its website, and there is no indication that such third country firm originates from a jurisdiction using the same language or has a clientele or is targeting potential clients in a non-EU jurisdiction also using the same language.

Who is the person soliciting?

•  Guideline 2 confirms that solicitation may be carried out by the third country firm itself or any person acting on its behalf or having close links with the third country firm.  ESMA states that a person may be soliciting EU clients on behalf of a third country firm even where there is no formal agreement or obvious remuneration between them and can include influencers.

Assessment of exclusive initiative of the client:

•  In accordance with Guideline 3, the client’s own exclusive initiative should be construed narrowly and based on the facts. Records tracking the relationship should be kept. Contractual arrangements or disclaimers cannot supersede contrary facts.

•  In terms of setting a time period for establishing whether contact is still maintained at the own exclusive initiative of the client, ESMA suggests a one month period.

Assessment of crypto-assets or services of the same type:

•  In relation to Guideline 4, ESMA clarifies that where a third country firm intends to use the possibility under Article 61(2) to market new crypto-assets or crypto-asset services of the same type, it is that firm’s responsibility to determine which crypto-assets or crypto-asset services are of the same type as the ones initially requested by the client at its own exclusive initiative and that this assessment should be based on: (i) the category of the crypto-asset crypto or asset service or activity offered, and (ii) the risks attached to each crypto-asset or crypto asset service or activity.

•  Guideline 4 contains a 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.

Supervision practices:

•  ESMA clarifies in its report that the supervision practices of competent authorities set out in the Guidelines do not need, as a pre-requisite, a reasonable suspicion of wrongdoing as they are meant to detect and prevent circumvention of MiCA. In response to a suggestion that the Guidelines include a cap on the number of transactions, ESMA states that whilst a large number of transactions based on reverse enquiry may be a good indication that there may be a breach of the authorisation requirements under MiCA, a number of transactions within a set cap would not ensure that such transactions are actually based on reverse enquiry and as such has not included such a cap in the Guidelines.

Interplay with MiFID II reverse enquiry regime:

•  ESMA confirms in its report that the Guidelines focus exclusively on the MiCA reverse solicitation regime and as such, any additional guidance or clarification needed for the MiFID II reverse enquiry regime will be addressed separately, if necessary.

Tips for compliance

Our extensive coverage of the EU and individual EU jurisdictions in our Rulefinder Crypto Asset service allows us to spot themes and trends on reverse enquiry practices. Here are some best practice guidelines to bear in mind when responding to reverse enquiries from investors in the EU:

•  No EU solicitation: With respect to marketing materials, ensure that your marketing has no EU-targeted content, uses geo-blocking for EU IP addresses, and avoids EU languages unless needed for non-EU users;

•  Scope: Take care to ensure that any service or transaction is strictly limited to what the investor requested and that there is no follow-on marketing (even of the same type of service or transaction). Differences in underlying technology, token reference currency etc may make a transaction or service different to the transaction or service the investor originally requested. It may be helpful to establish an internal classification of asset categories and services and map each client request against these before proceeding;

•  Group entities, affiliates and third party relationships: MiCA expressly provides that solicitation may occur regardless of who does it. Consider group wide policies that prohibit EU targeted marketing, and putting in place contractual restrictions and monitoring of affiliates/introducers/influencers to prevent any inadvertent solicitation on your behalf;

•  Frequency: Generally speaking, the higher the number of reverse enquiries responded to, the greater the risk of being viewed as conducting active marketing/selling activities. However, under the Guidelines, a smaller number of transactions does not automatically mean that they are based on reverse solicitation, the specific fact pattern for each transaction is more indicative;

•  Evidence: Consider processes to demonstrate that the request was genuinely unsolicited and made at the initiative of the investor. This can often be done by keeping an audit trail of any communications and obtaining a written acknowledgement from the investor that they have initiated the communication on their own initiative. A disclaimer will not help however, if you cannot show fact-based evidence that no solicitation has been made; and

•  Developments from Competent Authorities: Many competent authorities have indicated that they are aligning closely with ESMA (e.g. AMF, AFM, CNMV). However, some may publish their own guidance with respect to enforcement, and any such developments should be reviewed.

Final thoughts

The Guidelines have applied in the EU since 26 February 2025, following the publication of main document and its translations into all 24 official EU languages.

Competent authorities to which these guidelines apply were required to notify ESMA within two months of the publication date whether they: (i) comply, (ii) do not comply, but intend to comply, or (iii) do not comply and do not intend to comply with the guidelines. ESMA maintains a table of compliance in this respect (click here). The majority of Member States have now indicated that they intend to comply. There are a few outstanding who have not passed legislation as yet designating their competent authority under MiCA (and will therefore likely indicate compliance once they’ve done that).

For the issues explored in this article, contact aosphere for information we have on responding to reverse enquiries in relation to crypto-assets and crypto-asset services for the jurisdictions covered by aosphere Rulefinder Crypto Assets.

European Union Jurisdictions covered

ADGM, Africa, Argentina, Australia, Austria, Bermuda, Brazil, BVI, Cayman, Czech Republic, DIFC, Estonia, EU Member States, France, Germany, Hong Kong, India, Ireland, Italy, Japan, Jersey, Lithuania, Luxembourg, Malta, Mexico, Netherlands, Norway, Poland, Portugal, Singapore, South Africa, Spain, Sweden, Switzerland, UAE, United Kingdom and United States.