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To begin with, could you tell us a little about your legal background? Where did you study and what is your experience?

I graduated from the Faculty of Law at Comenius University in Bratislava. During my studies, I focused on achieving excellent results, but the faculty was not my primary place of work. Instead, I tried to divide my schedule into early morning and late evening classes so that I could always work. Right at the beginning of my studies, after less than two months, I got my first job at a law firm, so I also saw the practical side of law. It was a small office with a few employees, and at that time, a lot of things were still done on paper, so I visited courts and bailiffs a lot and got to know the work of other legal professions. Later, I worked in a relatively large firm with international clients, where I was given plenty of space to work independently. I had a different working style than the other students because I had my own office and my own agenda, for which I was responsible and for which I needed to create a system. At the same time, I also collaborated on more complex tasks, where I had the opportunity to learn from great lawyers.

By working in advocacy from the very beginning of my studies, I gained at least some experience with most legal agendas and areas – from routine commercial register and debt collection matters to litigation, legal advice to investors and start-ups, to my current focus on finance. This has allowed me to gradually deepen my expertise, learn to respond flexibly to market changes, and build up a range of knowledge and experience in several fields.

What areas of law do you specialize in?

Currently, my specialization is mainly in commercial and financial law, with a significant overlap into crypto assets and financial technology (fintech). This is also related to my work on projects dealing with the provision of crypto asset services and regulation in this area. At the same time, I also deal with compliance and AML issues, i.e., compliance with regulatory rules and guidelines that serve primarily to protect investors and ensure transparency in financial markets. In practice, this means that I help clients in this sector to set up the legal framework for their business so that it complies with applicable laws and at the same time to enable them to meet all legal requirements effectively, taking into account the development of their business. In this context, I also deal with issues of cyber security and digital operational resilience, although this is a complex and broad area and I am still gradually finding my feet and working mainly as legal support for our colleagues who are experts in this field.

What led you to law in the field of crypto assets and financial market regulation?

After graduating, I didn't want to specialize in one area right away. I enjoyed several areas, mainly contract law and labor law, and it was difficult for me to rule out certain areas without even trying them. But of course, I knew that specialization is very important in law, because the narrower your focus, the more of an expert you can become in that area. Nowadays, it is really an advantage to have the narrowest possible specialization and atomization within a team, because that is the only way to become an expert in a particular area. The era of polymaths and lawyers with a broad universal focus is gradually coming to an end, because with the current number of regulations and the speed of change, it is not possible to have sufficient knowledge of several branches of law, let alone all or almost all of them.

As far as financial measurement is concerned, it was more a matter of circumstances than any initial interest in finance and digitalization. I sat next to a colleague in the office who was more interested in these topics and made great progress and developments in them, and thanks to him, I also began to see the innovation and potential of the sector. We worked together on some projects, but then I went on maternity leave and he left to work for a supervisory authority. As I returned to work relatively quickly after maternity leave, which required a great deal of flexibility, and as there was a need at that time for someone who could cover these topics, these two circumstances came together and I gradually began to delve deeper into them. However, I gradually began to enjoy the subject, and finding a balance between the need for regulation and preserving innovation in such a dynamic sector is both motivating and challenging for me. 

What changes will MiCA bring to the crypto asset market?

The MiCA Regulation is definitely a revolutionary piece of legislation worldwide for the hitherto almost unregulated world of crypto assets, which is based on the ideas of decentralization and differentiation from "traditional" financial systems and their regulatory framework. The MiCA Regulation covers all types of crypto assets that are not yet regulated by existing financial services legislation and introduces uniform rules, including the need to obtain a license and supervise cryptoasset service providers, which are precisely the principles of financial regulation for many standard financial institutions and institutions.

For the market, this means greater transparency and increased certainty for investors, but also certain increases in costs and administrative requirements for service providers. Overall, however, MiCA should bring greater legitimacy and credibility to the crypto segment in the eyes of the public, business partners, and regulatory authorities.

Who will be affected by the regulation?

The MiCA Regulation applies from 30 December2024 to natural and legal persons and certain other entities engaged in the issuance of crypto assets, their public offering and admission to trading, or providing services related to crypto assets within the Union.

In principle, however, some obligations apply more broadly, for example Article 92(1) of the MiCA Regulation imposes market abuse prevention obligations on any person who professionally arranges or executes transactions in crypto assets – a broader concept than that of crypto asset service provider and which may also include persons who trade professionally on their own account. However, according to some statements by the European supervisory authority ESMA, this applies more to persons who also have employees and a structure through which they systematically trade crypto assets on their own account. However, it is certainly necessary to bear in mind that even a company that is not directly a crypto-asset service provider may, under this provision, be required to report suspicious transactions if it encounters them in the course of its activities.

Persons who, before 30 December 2024 in accordance with a special regulation to provide virtual currency exchange services, virtual currency wallet services or services and activities that, by their nature, meet the criteria for cryptoasset services, may continue to do so until 30 December 2025 at the latest. The transition period is therefore only 12 months, i.e. it will end in Slovakia six months earlier than the maximum transition period set by the MiCA Regulation. This is not entirely appropriate, as there has been virtually no regulation of the crypto sector in Slovakia to date, with only a regulated trade licence, which was not particularly difficult to obtain, and although entities already had AML obligations, in most cases their compliance is not sufficient for the purposes of the licensing procedure to the extent required of a licensed entity, and these AML policies also need to be properly established by applicants, Therefore, entities must move from a regulatory level of zero to a relatively strict level of regulation comparable to other entities in the financial sector, and the time frame in which they must do so and obtain a license is extremely short. It is therefore essential that crypto-asset service providers enter the licensing process as soon as possible if they wish to continue operating.

I would add that if an entity provides crypto-asset services on a "grandfathering" basis, i.e. during this transitional period, it cannot yet benefit from passporting and therefore cannot transfer its services to another Member State without further ado, unless the host country also allowed this under the old rules before the MiCA came into force. Importantly, such entities cannot transfer their services to a Member State that has already ended the transitional period. 

How will MiCA affect crypto-asset service providers?

Crypto-asset service providers will have to obtain the appropriate authorization to provide their services within the EU, which includes preparing to meet a broad list of licensing conditions and then going through a relatively complex licensing process with the supervisory authority. At the same time, they will be required to comply with strict rules on security, segregation of client assets and user information. The main changes are in the area of digital operational resilience of entities, which are subject to a wide range of obligations under the separate DORA regulation, which is also linked to numerous technical implementing rules. There will also be new requirements for the disclosure of risk information and rules on marketing communications, which will help investors make informed decisions. In practice, this means more administration for crypto-asset service providers, as well as the need to change some processes and bring them into line with the requirements of the new regulation, but at the same time it should lead to a more transparent and secure environment for all involved.

What are the main challenges associated with the implementation of MiCA?

For service providers, the main challenge is adapting their business model and ensuring that they have the technical and human resources to fulfill all their obligations. Service providers will have to go through a demanding adaptation process, including reorganizing internal processes and updating contracts and internal regulations, in order to obtain the necessary authorization. All this will require time, money, and ideally expert legal assistance.

The crypto asset market is mainly made up of smaller start-ups and technology companies that may not be able to meet all the relatively broad conditions, which may represent a disproportionate regulatory burden for them. The MiCA Regulation will certainly bring about significant consolidation in the market and among crypto-asset service providers, mainly due to the complexity of the authorization process compared to the previous regime, where these activities were only subject to a tied trade license. A smaller number of crypto-asset service providers may lead to a lack of competition in the market and the unavailability of certain services and types of crypto-assets.

The main regulatory challenges certainly include the harmonization of existing national regulations and the alignment of different approaches of Member States with the new rules. Another regulatory challenge is rapid technological development – in this segment, both European and national legislators need to ensure that regulation is sufficiently flexible and does not hinder innovation. Although the MiCA Regulation is written in relatively general terms, discussions are already emerging on the inclusion of certain new phenomena within the scope of the Regulation. At the same time, ESMA, as the European supervisory authority, has also launched consultations on decentralized activities and systems (DeFi), which blur the traditional boundaries between service providers and users, and is considering options for their regulation. DeFi in particular raises questions about who should fulfill regulatory obligations or bear legal responsibility, and there is growing talk of the need for further legislative measures beyond the MiCA Regulation itself. 

Is MiCA a step in the right direction for the crypto market?

In my opinion, MiCA is an important step towards clearer rules of the game. It reduces legal uncertainty and prevents "regulatory arbitrage" where companies move to countries with more lenient laws. Crypto is no longer a new topic, and the market has grown to such an extent that it is capable of shaking the financial sector worldwide, so the need for regulation is truly essential.

MiCA represents a significant harmonization of legislation in the EU, as it replaces the different and inconsistent rules that have existed across EU Member States since its entry into force.

Transparency and information are certainly key, and this is further linked to investor protection, increased financial system security, and the clarification of measures to prevent money laundering and terrorist financing in the area of cryptoassets.

For retail clients of cryptoasset services, the new rules may increase the availability, quality, and comprehensibility of the services provided, as well as the level of protection for clients when using them, as they will limit market abuse in the cryptoasset market to a certain extent.

At the same time, entities that successfully obtain a license to provide cryptoasset services will enjoy greater credibility in the eyes of investors and traditional financial institutions, particularly banks and credit institutions, which may be more open to cooperation.

In my view, MiCA represents a significant and positive step by the EU, reflecting the need for meaningful regulation of such an important market. Although it is already clear that the regulation will need to be adapted in the future to reflect practical experience, it provides greater legal certainty for investors and contributes to a more transparent environment, which will naturally weed out dubious projects from the market.

How do you see the future of crypto asset regulation? Do you think it will become even stricter?

I expect regulation to gradually grow and improve. Crypto assets are no longer a fringe phenomenon – they are changing the way people invest, transfer value, and use various financial products. More and more people are investing in crypto assets, and they are becoming more accessible. At the same time, however, transactions involving cryptoassets remain largely anonymous, which naturally increases the interest of governments and international institutions seeking to protect consumers and prevent financial crime. However, it is important that the new regulatory framework does not stifle innovation. On the contrary, it should help create an environment of trust for responsible players while eliminating fraudulent projects. 

What legal aspects do you consider most complicated in the regulation of crypto assets?

One of the fundamental elements is the correct classification of crypto assets – this determines further legal consequences, it is necessary to assess their nature as a financial instrument and the application of securities regulations, and subsequently what the obligations are on the part of the issuer and the entity marketing these crypto assets.

For cryptoasset service providers, security is key, especially the protection of private keys, AML (Anti-Money Laundering) and KYC (Know Your Customer), as well as cybersecurity. This is not just an internal document in a drawer, but a set of ongoing processes that entities set up at the outset, and it is necessary to be as specific as possible, taking into account the specific business model of the entity and the specific risks in terms of their own products, services, and clients, technical infrastructure, supply chains, and third parties, but it does not end there. These processes require constant monitoring, development, and improvement, and tend to be financially and administratively burdensome for entities.

It is important for supervisory authorities to address international cooperation, as crypto-asset markets are global and therefore inherently cross-border. The Union should therefore continue to support international efforts to promote convergence in the treatment of cryptoassets and cryptoasset services through international organizations or bodies. At the global level, there is a major question as to how this cryptoasset market can be coordinated and approached, as well as the need for global regulation that is more universal across jurisdictions. Some international organizations are addressing this agenda, for example, the World Economic Forum has published a white paper on a global approach to the regulation of crypto assets, and the International Organization of Securities Commissions has published a detailed manifesto of 18 principles for global regulation of the crypto sector. Of course, some form of global uniform regulation is not realistic at this stage, but these principles and the outputs of international organizations can act as soft law, and can then be taken into account in legal regulations in jurisdictions around the world and contribute to greater legal unity.

How can a law firm help entrepreneurs adapt to the new MiCA regulation?

A law firm can provide clients with comprehensive advice in preparing for legislative changes. Specifically, this includes, for example, the correct identification and categorization of crypto assets, assistance in preparing internal regulations and setting up processes so ensure that the entity complies with all legislative requirements, representation in proceedings to obtain the necessary permits, and review of contractual documentation and internal processes, even after obtaining a compliance permit. This will help businesses avoid the risk of their activities being in breach of the MiCA Regulation, which could lead to sanctions or a loss of investor confidence. 

What legal risks should investors in cryptoassets be aware of?

Investors should bear in mind the volatility and technical complexity of crypto assets, which may be prone to rapid price fluctuations. Even though we have MiCA regulation, which will only allow licensed and supervised entities to operate on the European market, crypto assets should still be viewed as a risky investment and only funds that I am willing to accept the level of risk should be invested. European institutions continue to highlight this and raise awareness of the risks associated with this type of investment. It is also important to protect personal access data, as the loss or theft of private keys can mean the irretrievable loss of an investment.

Retail clients must always be properly informed about the characteristics, functions and risks of the crypto-assets they intend to purchase through a crypto-asset white paper, which is also reported to the NBS. The crypto-asset white paper contains general information about the issuer, the person offering the crypto assets, the project to be implemented using the capital raised, the public offering of the crypto assets or their admission to trading, the rights and obligations associated with the crypto assets, the underlying technology used in such crypto assets, and the relevant risks. The information provided in relevant marketing communications, such as advertising messages and marketing materials, is also subject to control and must be impartial, clear, not misleading, and consistent with the information provided in the crypto asset white paper.