For crypto entrepreneurs and token issuers, the white paper is now the cornerstone of compliance. It determines your ability to offer tokens to the public, trade on exchanges, and operate without facing severe penalties from National Competent Authorities (NCAs). Under the new rules, a white paper functions similarly to a prospectus in traditional finance; it must be complete, fair, clear, and not misleading.
This guide details exactly what is required to draft a compliant white paper, the technical standards you must meet, and the liabilities you face as an issuer.
Under Title II of MiCA, the general rule is strict: no person shall make an offer to the public of a crypto-asset or seek admission to trading on a trading platform within the Union unless they have drawn up, notified, and published a crypto-asset white paper.
This requirement applies to the vast majority of token issuance projects, specifically those falling into the category of “other crypto-assets,” which includes utility tokens. However, the regulation provides specific exemptions and delineations depending on the nature of your project.
Not every crypto project requires a full-blown white paper. To support innovation and avoid burdening startups with disproportionate administrative costs, MiCA outlines several exemptions.
You may not need to publish a white paper if your offer to the public meets one of the following criteria:
It is vital to note that a token is not considered “offered for free” if the purchaser is required to provide personal data in exchange, or if the issuer receives any fees, commissions, or monetary benefits from the prospective holders. Furthermore, specific “limited network” exemptions exist for utility tokens used only for goods and services within a limited network of merchants, though if this exceeds the 1,000,000 EUR threshold, you must still notify the competent authority.
The regulatory burden for your white paper depends entirely on how your token is classified under MiCA. The regulation distinguishes three main categories:
Note that unique and non-fungible crypto-assets (NFTs) are generally excluded from MiCA, provided they are truly unique and not fractionalized.
A MiCA white paper is a comprehensive disclosure document. It must contain detailed information about the issuer, the project, the rights attached to the tokens, and the underlying risks. The information must be presented in a concise and comprehensible form.
One of the most distinct new requirements under MiCA involves environmental transparency. The European Union has a policy interest in ensuring that the consensus mechanisms used to validate transactions do not have adverse climate impacts.
Your white paper must include information on the principal adverse impacts on the climate and other environment-related adverse impacts of the consensus mechanism used to issue the crypto-asset. This is not optional. ESMA (the European Securities and Markets Authority) is mandated to develop regulatory technical standards regarding the methodology and presentation of these sustainability indicators.
If your project utilizes a Proof-of-Work (PoW) ledger or another energy-intensive protocol, you must disclose the energy consumption, renewable energy usage, and production of waste associated with the validation of transactions.
Transparency regarding the team and the entity behind the token is mandatory. The “anonymous dev team” era is incompatible with MiCA compliance for public offers.
The white paper must disclose:
Additionally, if the offer concerns a utility token for a service that does not yet exist, the duration of the public offer cannot exceed 12 months from the publication of the white paper.
Protection of retail holders is a primary objective of MiCA. Your white paper must contain a clear and unambiguous statement that the crypto-asset may lose its value in part or in full, may not always be transferable, and may not be liquid.
Crucially, for “other” crypto-assets (utility tokens), you must inform investors of their Right of Withdrawal. Retail holders have a period of 14 calendar days to withdraw from their agreement to purchase crypto-assets directly from the issuer without incurring fees or giving a reason.
This right of withdrawal does not apply if the crypto-assets have already been admitted to trading on a trading platform prior to the purchase.
Unlike the prospectus regulation for traditional securities, MiCA does not generally require the competent authority to approve the white paper before publication for “other crypto-assets”. This is a “notify and publish” regime, which reduces administrative bottlenecks but places high responsibility on the issuer.
The Timeline: You must notify the white paper to the competent authority of your home Member State at least 20 working days before the date of publication.
The Content of Notification: The notification must include the white paper itself and an explanation of why the crypto-asset should not be considered an ART or an EMT. You must also provide a list of host Member States where you intend to offer the token.
Cross-Border Passporting: Once notified and published in accordance with Article 9, you may offer the crypto-assets throughout the entire Union. The competent authority of your home Member State will communicate your white paper to ESMA and the single points of contact in other host Member States. ESMA will then make your white paper available in a public register.
Deep dive: Rules of Publishing a Crypto White Paper Under MiCA
Many issuers are unaware that MiCA introduces strict technical formatting requirements. It is no longer sufficient to upload a static PDF to your website.
Article 6(10) of the Regulation explicitly states: “The crypto-asset white paper shall be made available in a machine-readable format”.
ESMA, in cooperation with the EBA, is tasked with developing implementing technical standards (ITS) to establish standard forms, formats, and templates for this purpose. This generally points toward the use of iXBRL (Inline eXtensible Business Reporting Language), a standard already used in EU securities markets (ESEF). This format allows regulators and investors to automatically scrape, analyze, and compare data across thousands of white papers.
Failing to format your white paper correctly means you are not compliant with Article 6, which could lead to a suspension of your offer. You will likely need technical partners to convert your legal text into this specific machine-readable code.
Perhaps the most critical aspect of MiCA for founders is Article 15: Liability for the information given in a crypto-asset white paper.
If a white paper contains information that is not complete, fair, or clear, or if it is misleading, the issuer and the members of its administrative, management, or supervisory body are liable to the holder for any loss incurred due to that infringement.
Key liability points:
The burden of proof lies with the holder of the crypto-asset to present evidence that the information was misleading and that they relied on it. However, given the explicit requirements of the regulation, defending against such claims requires a meticulously drafted document that meets every single disclosure requirement of Annex I, II, or III.
The transition to MiCA compliance involves navigating a complex web of legal definitions, technical formatting (XBRL), and strict notification timelines. A simple marketing deck is now a liability trap.
At LegalBison, we specialize in guiding crypto projects through the EU regulatory landscape. Our services for MiCA Token Issuance include:
The deadline for full MiCA application is fast approaching. Ensure your project is future-proof and compliant.
Contact LegalBison today for a free consultation on your MiCA strategy.
