Staking under MiCA

Staking, in the narrow sense, is immobilising crypto-assets to support a proof-of-stake or proof-of-stake-like consensus mechanism, in exchange for validator privileges that can generate block rewards. MiCA has no article devoted to that activity. What is public is two ESMA Q&As: 2067, on the treatment of staking services, and 2607, on staking for the provider’s own account. This page stays with those two answers and the articles they cite. It does not redefine custody: that is in custody and client funds. It does not cover lending: that is in lending and earn.

Staking by the holder, and staking as a service

Q&A 2067 separates two planes. On the first, the holder deals directly with the protocol, on its own account, to obtain validator privileges and, in time, rewards, or commits assets to a liquidity pool for a yield. MiCA, the answer says, does not prohibit that staking and does not subject it to a specific licence. On the second, an intermediary stakes on the client’s behalf for a consideration. The provider collects the yield or the validator privileges and shares them between its own consideration and the client, who remains the owner. There the crypto-assets, or the keys, are in the provider’s custody. The answer concludes that the service is ancillary to custody, which MiCA covers, and that authorisation is required for custody and administration of crypto-assets on behalf of clients under Article 75.

That authorisation is letter a of Article 3(1)(16). The other letters are in the services guide. Holding other letters and not letter a does not, on Q&A 2067, cover staking as a service. Checking whether the row carries letter a is the step in the checklist.

The duties Q&A 2067 cites

The answer lists, without claiming the list is exhaustive, Articles 59, 62, 66, 67, 68, 69, 70, 71, 72, 73, 74 and 75. It draws three consequences. The CASP must be able to return the assets in line with the custody agreement. It is liable to the client for the loss of crypto-assets attributable to it, under Article 75(8). And losses arising from the staking service provided to the client, and from the underlying staking activity, should be deemed attributable to the CASP. Where staking is combined with other MiCA services, the answer asks for the client’s explicit consent, because it may affect the client’s ability to access the assets.

Article 75(8) caps that liability at the market value of the crypto-asset lost, at the time the loss occurred, and it excludes an incident the provider shows occurred independently of the service or of its operations, such as a problem inherent in a chain the provider does not control. Q&A 2067 does not raise that cap. The custody guide explains the segregation in paragraph 7, which is a different piece: the provider’s creditors should have no recourse to what is held in custody, in accordance with applicable law. Neither text creates a public fund that pays a reward that did not arrive.

What Q&A 2607 does not allow

Article 70(1) requires a CASP that holds clients’ crypto-assets, or the means of access, to prevent their use for its own account. Q&A 2607 concludes that MiCA does not allow the CASP to stake clients’ crypto-assets for its own account, even where the client has explicitly consented. It does allow the CASP and the client to agree the terms of staking as a service, provided the profits do not benefit the CASP alone. The footnote points back to Q&A 2067: the yield is shared between the provider, as consideration, and the client, who owns the assets.

The same answer adds Article 66. The CASP must act honestly, fairly and professionally in the best interests of the client, and information, including marketing, must be fair, clear and not misleading. ESMA recommends explaining the cost the client ultimately bears: fees taken by the CASP and those charged by third parties. An “APY” figure without that breakdown does not, on its own, do what the answer asks.

What to check on the platform

1. If you stake yourself, with your own keys, against the protocol, Q&A 2067 says that is not a service subject to its own licence. Other rules, including tax, can still apply; this page does not develop them.
2. If the exchange immobilises your crypto-assets, look for letter a on the row. Without that letter, Q&A 2067 does not see the service as covered.
3. Read whether the return is shared or whether the exchange stakes for its own account. The second conflicts with Q&A 2607 even if you clicked accept.
4. Ask for the custody agreement and the fee breakdown that Articles 75 and 66 refer to.
5. Do not confuse this service with a loan of your crypto-assets to a third party. That is not in Q&A 2067. It is, as an absence from the list, in the lending guide.

Profiles that carry letter a, where the file has it, open from the home page. A selection of brands is on alternatives. A brand having letter a does not mean its particular staking product meets Q&A 2067: that is in the contract, not only in the row.

Common questions