1. WHAT IS REGULATED - DLT vs Crypto-Asset

DLT: Distributed ledger technology - database replicated across nodes. Not automatically regulated.

Regulated triggers:

On policy side, EU's DLT Pilot Regime effective March 2023 permits regulated venues to trade and settle tokenized financial instruments, while MiCA rolling out between 2024 and 2026 provides de facto playbook

2. EU FRAMEWORK - The Gold Standard Now

A. MiCA - Regulation 2023/1114
Fully applicable since 30 Dec 2024 for CASPs. Key:

• CASP licence: 1 licence from home regulator (e.g. CNMV in Spain, AMF France) passports to 27 countries. By Q1 2025 over 65% of crypto businesses in EU achieved MiCA compliance and 40+ CASP licences issued.
• Stablecoin rules from 30 June 2024: EMT issuers must be licensed E-money institution, daily reserve reporting, no interest on EMTs.
• Market abuse, insider, custody segregation, capital requirements €150k-€750k
• Reverse solicitation ban: Non-EU exchange cannot onboard EU clients without licence unless client initiates.

B. DLT Pilot Regime - Regulation 2022/858
Sandbox to tokenize securities:

• Allows DLT MTF, DLT SS, DLT TSS to trade and settle tokenized stocks/bonds with derogations from CSDR
• Limits: €6bn market cap per issuance, €9bn total
• Spain lead: CNMV granted authorization under DLT Pilot Regime - Securitize got EU licence in Spain Nov 2025, first company licensed to run tokenization infrastructure in both EU and US. Operates on Avalanche.
• 21X in Germany first DLT MTF licence Dec 2024.

C. DORA - Regulation 2022/2554
All CASPs and DLT venues must have ICT risk management, resilience testing from Jan 2025.

3. SPAIN SPECIFIC

Three layers:

Financial Sandbox - Law 7/2020: Since 2021, managed by Treasury + CNMV + Banco de España. Allows testing blockchain products in controlled conditions without full licence.

MiCA Transposition - Law Project 2024-2026: Published in BOCG:

crypto-asset service providers become obliged entities under AML law like any financial institution, CNMV will authorise them and hold Spanish register, and it rewrites article 247 of Ley 6/2023 on CNMV powers over crypto-asset advertising

CNMV is competent authority for CASP. Deadline for amendments 9 Sept 2026.

1. Alastria & BME: Alastria is one of Europe's largest enterprise blockchain networks. BME via Iberclear will manage trading and settlement system under DLT Pilot Regime.

4. US TRENDS

Enforcement-based → Legislation-based:

• GENIUS Act 2025: Federal framework for payment stablecoins - 1:1 reserve with short-term T-bills, issuer must be permitted stablecoin issuer.
• CLARITY Act (pending): Will define when token is security vs commodity, dividing SEC/CFTC.
• SEC Enforcement shift: 2023-24 heavy enforcement under Howey, 2025 shift to compliance.

5. INDIA TRENDS

No dedicated crypto law yet, but 4 regulations already:

a) Supreme Court Judgment - Internet and Mobile Association of India v. RBI W.P. (Civil) No. 528 of 2018, 4 March 2020
RBI Circular 6 April 2018 banned banks from servicing crypto businesses.
Supreme Court bench of Justice Nariman, Bhat, Ramasubramanian lifted ban:

ban violated Article 19(1)(g) freedom to carry trade, RBI action not proportionate, no evidence of harm to payment system. RBI cannot act without statutory authority.

This revived industry.

b) Taxation - Finance Act 2022:

• Sec 115BBH - 30% flat tax on crypto gains + 1% TDS under Sec 194S
• No set-off of losses, no deduction except cost of acquisition

c) AML - March 2023 Notification:
Crypto exchanges, custodians, wallet providers are "reporting entities" under PMLA, must register with FIU-IND, KYC, STR.

d) RBI stance: Still advises banks caution, working on CBDC e-Rupee pilot.

6. KEY CASE LAWS YOU MUST KNOW

A. SEC v. W.J. Howey Co., 328 U.S. 293 (1946) - Foundation
Howey Test = Investment contract is security if: (1) Investment of money (2) In common enterprise (3) Expectation of profits (4) From efforts of others. Still used for all token cases.

B. SEC v. Telegram - Gram Tokens, SDNY 2020
Telegram raised $1.7bn for Grams. Court held initial SAFT + future Grams were single scheme, all securities under Howey. Telegram forced to return $1.2bn + $18.5m penalty. Rule: You cannot bypass Howey by two-step SAFT.

C. SEC v. Ripple Labs, SDNY July 13, 2023 - Judge Torres - Landmark

To be considered security, three prongs of Howey must be established.

Court split:

• Institutional Sales $728m via contracts = Securities - Ripple pooled proceeds, buyers expected profits from Ripple efforts to market XRP - Violated Sec 5.
• Programmatic Sales on exchanges to retail = NOT Securities - Retail buyers could not know if payment went to Ripple or another seller, blind bid/ask, no reasonable expectation of profits from Ripple.
• Other distributions (to employees) = Not investment of money

Result: Ripple fined $125m Aug 2024 vs SEC seeking $2bn. Now most influential precedent for exchange listings.

D. SEC v. Coinbase, SDNY 2024
Staking-as-a-Service is investment contract. Coinbase Wallet not broker.

E. EU - Case C-264/14 Hedqvist 2015
Bitcoin exchange is VAT-exempt service, currency not commodity. Used to exempt crypto trading from VAT in EU.

F. Spain - CNMV Circular 1/2022 on crypto advertising + STS 210/2022
Influencers must include risk warnings. First Spanish Supreme Court ruling on Bitcoin theft - Bitcoin is intangible asset, can be object of fraud (estafa).

7. 2025-2026 Trends

1. Tokenization of Real World Assets (RWA): MiCA + DLT Pilot allow tokenized bonds, real estate. Deloitte: tokenization can slash costs 30% and enable 24/7.
2. Stablecoin Consolidation: Only 2 EMT issuers fully compliant in EU (Circle, Société Générale) - many delisted non-compliant USDT pairs.
3. DeFi under scope - MiCA 2.0: Currently DeFi truly decentralized excluded, but EU consultation 2025 aims to bring front-ends under CASP.
4. Travel Rule: EU Reg 2023/1113 - All crypto transfers must include originator/beneficiary info from Jan 2025, same as wire transfers.