MiCAR or eWpG: which regime applies to your token?

Short answer

MiCAR (Regulation (EU) 2023/1114 on markets in crypto-assets) does not apply to crypto-assets that qualify as financial instruments (Art. 2(4)(a) MiCAR). Tokenised bonds, shares or fund units of a German capital management company (KVG) therefore remain within securities and investment law: bonds and shares are governed by the Electronic Securities Act (eWpG), the EU Prospectus Regulation and the German Securities Prospectus Act (WpPG), units in investment funds by the German Investment Code (KAGB), not by the MiCAR white paper regime. ESMA's guidelines on the qualification of crypto-assets as financial instruments (ESMA75453128700-1323, published in all official languages on 19 March 2025) make clear that the technological format is not decisive; what matters is the content of the rights.

At a glance

Art. 2(4)(a) MiCAR: financial instruments are excluded from MiCAR's scope.
A financial instrument under Art. 4(1)(15) MiFID II expressly includes instruments issued by means of distributed ledger technology (as amended by Art. 18 of Regulation (EU) 2022/858).
MiCAR has applied since 30 December 2024, Titles III and IV (asset-referenced tokens and e-money tokens) since 30 June 2024 (Art. 149 MiCAR).
ESMA guidelines: a crypto-asset is a transferable security if it cumulatively is not an instrument of payment, belongs to a class of securities and is negotiable on the capital market.
Prospectus exemption since 5 June 2026 for public offers of securities below EUR 12 million per issuer or offeror over 12 months, provided there is no notification under Art. 25 Prospectus Regulation (Art. 3(2) Prospectus Regulation as amended by Regulation (EU) 2024/2809).

Where is the boundary between crypto-asset and financial instrument?

Under Art. 3(1)(5) MiCAR, a crypto-asset is a digital representation of a value or a right that can be transferred and stored electronically using distributed ledger technology or similar technology. This definition is technical and broad. Almost every token meets it, including a tokenised security.

The boundary is therefore drawn through the exclusions in Art. 2(4) MiCAR. Under point (a), MiCAR does not apply to crypto-assets that are financial instruments. Further exclusions cover, among others, deposits, funds unless they qualify as e-money tokens, securitisation positions, and insurance and pension products (Art. 2(4)(b) to (j) MiCAR).

What a financial instrument is, is not defined by MiCAR itself but by Art. 4(1)(15) MiFID II (Art. 3(1)(49) MiCAR). Since the amendment by Art. 18 of the DLT Pilot Regime Regulation (EU) 2022/858, the term expressly includes instruments issued by means of distributed ledger technology. A security therefore remains a security when it is issued as a token. Investment products under the German Capital Investment Act (Vermögensanlagengesetz, VermAnlG) do not fall under the MiFID II concept of a financial instrument.

What do the ESMA guidelines say about classification?

Art. 2(5) MiCAR required ESMA to issue guidelines on the conditions and criteria for the qualification of crypto-assets as financial instruments by 30 December 2024. ESMA presented its final report on 17 December 2024 and published the guidelines (ESMA75453128700-1323) in all official languages on 19 March 2025. The guidelines apply 60 calendar days after that publication and are addressed to supervisory authorities and market participants.

Guideline 1: the technological format is not a determining factor. Tokenising a financial instrument does not change its classification.
Guideline 2: a crypto-asset is a transferable security if it cumulatively is not an instrument of payment, belongs to a class of securities and is negotiable on the capital market. Substance prevails over form.
Negotiability: the abstract possibility of transfer is sufficient, even with a temporary lock-up. A whitelist alone does not prevent classification as a security.
Guideline 4: a unit in a collective investment undertaking exists where capital from several investors is pooled, invested according to a defined investment policy and used to generate a pooled return for them.
Guideline 9: for hybrid tokens, it must first be assessed whether a financial instrument exists. If so, that classification takes precedence; labels used by the issuer are not decisive.

According to the ESMA guidelines, tokens providing regular interest payments and/or promising repayment of principal at a later date belong to a bond-like class of securities; they qualify as transferable securities if they are also negotiable on the capital market. Tokens conferring a stake in capital with voting, dividend or liquidation rights have share-like features according to the ESMA guidelines.

Which feature leads to which regime?

The table summarises typical features and the resulting classification. It does not replace a case-by-case assessment, which the ESMA guidelines always require.

Token feature	Classification	Applicable regime
Interest claim and repayment, standardised and transferable	Bond, transferable security	Prospectus Regulation, WpPG, WpHG; eWpG possible for bearer bonds
Membership in an AG with profit or voting rights	Share	AktG, eWpG (Section 1 nos. 2 and 3; bearer shares only in a central register), Prospectus Regulation
Pooled capital, invested according to a defined investment policy	Unit in an investment fund	KAGB; for contractual investment funds (Sondervermögen), crypto fund units under the KryptoFAV
Profit, interest or subordinated claim without the characteristics of a security	Investment product under the VermAnlG, not a MiFID financial instrument	Possibly MiCAR Title II; VermAnlG only insofar as MiCAR does not apply (Section 1(1) sentence 3 VermAnlG)
Exclusively access to a good or service of the issuer	Utility token (Art. 3(1)(9) MiCAR)	MiCAR Title II, exemptions under Art. 4(3) possible
Value stability by reference to one official currency	E-money token (Art. 3(1)(7) MiCAR)	MiCAR Title IV
Value stability by reference to other values or a basket	Asset-referenced token (Art. 3(1)(6) MiCAR)	MiCAR Title III
Unique and non-fungible	Non-fungible crypto-asset	Outside MiCAR (Art. 2(3)), unless a financial instrument

Prospectus or white paper: which duties follow from the classification?

Securities are subject to the Prospectus Regulation (EU) 2017/1129. Securities within its meaning are transferable securities under Art. 4(1)(44) MiFID II, excluding money market instruments with a maturity of less than twelve months (Art. 2(a) Prospectus Regulation). A public offer generally requires an approved prospectus (Art. 3(1) Prospectus Regulation).

Since 5 June 2026, public offers of securities are exempt from the prospectus requirement if they are not subject to notification under Art. 25 Prospectus Regulation and the aggregated total consideration in the Union over twelve months is less than EUR 12 million per issuer or offeror (Art. 3(2)(a) and (b) Prospectus Regulation as amended by Regulation (EU) 2024/2809). Under Art. 3(2c) Prospectus Regulation, this threshold includes all ongoing public offers and those made in the last 12 months, across all types and classes of securities; offers with a prospectus or under an exemption pursuant to Art. 1(4) first subparagraph Prospectus Regulation are not counted. Member States may instead choose a threshold of EUR 5 million (Art. 3(2a)) and may require a national information document for prospectus-exempt offers (Art. 3(2d)). Germany has not chosen the EUR 5 million threshold and requires the securities information sheet (Wertpapier-Informationsblatt, WIB) under Section 4 WpPG.

In Germany, the WIB is the mandatory document for prospectus-exempt public offers of securities of EUR 100,000 or more over twelve months (Section 4(1) WpPG). Exceptions are set out in Section 4(1) sentence 2 WpPG, among others for credit institutions, for issuers with shares admitted to a stock exchange and for offers requiring a PRIIP key information document. BaFin must permit publication of the WIB beforehand (Section 4(2) WpPG), and for electronic securities the WIB may be up to four A4 pages long (Section 4(3a) WpPG). The Location Promotion Act 2026 (Standortfördergesetz) abolished the former individual investment thresholds for retail investors in offers with a WIB (Section 6 WpPG old version). Which further requirements apply to your offer, for example regarding the involvement of an intermediary, is clarified during structuring.

For crypto-assets other than asset-referenced tokens or e-money tokens, Art. 4(1) MiCAR requires, among other things, that the offeror is a legal person and draws up, notifies and publishes a crypto-asset white paper. The white paper must be notified to the competent authority at least 20 working days before publication (Art. 8(5) MiCAR); no prior approval is required (Art. 8(3) MiCAR).

Aspect	Security (Prospectus Regulation, WpPG)	Other crypto-asset (MiCAR Title II)
Mandatory document	Prospectus or, under the Art. 3(2) exemption, generally a WIB under Section 4 WpPG	Crypto-asset white paper (Art. 6 MiCAR)
Regulatory review	Approval of the prospectus within ten working days per submission, 20 working days for the first submission of a first-time issuer (Art. 20(2), (3) Prospectus Regulation); permission to publish the WIB within ten working days (Section 4(2) WpPG)	Notification 20 working days in advance, no approval
Small offers	No WIB below EUR 100,000 in twelve months (Section 4(1) sentence 2 no. 1 WpPG)	Art. 4(1)(b), (c), (d) and (f) MiCAR (including the white paper) do not apply, among others, up to EUR 1 million in twelve months or with fewer than 150 persons per Member State acting on their own account (Art. 4(2) MiCAR); not where admission to trading is intended (Art. 4(4) MiCAR)
Register	Electronic securities register under the eWpG possible	No register under the eWpG

More at heartstocks: Prospectus requirement and WIB 2026

What applies to utility tokens, e-money tokens and ARTs?

A utility token is a crypto-asset intended exclusively to provide access to a good or service supplied by its issuer (Art. 3(1)(9) MiCAR). If the offer concerns a utility token for an existing good or service, Title II of MiCAR does not apply (Art. 4(3)(c) MiCAR). According to the ESMA guidelines, a utility token that provides no financial returns comparable to financial instruments, such as dividends or interest, and does not belong to a class of securities is not a transferable security, even if buyers hope for an increase in value.

An e-money token aims to maintain a stable value by referencing the value of one official currency (Art. 3(1)(7) MiCAR). An asset-referenced token (ART) is a crypto-asset that is not an e-money token and aims to maintain a stable value by referencing another value or right or a combination thereof (Art. 3(1)(6) MiCAR). Titles IV and III of MiCAR apply to them and have been applicable since 30 June 2024 (Art. 149(3) MiCAR).

Why does heartstocks focus on securities?

heartstocks GmbH, based in Hamburg, supports issuers in the digital issuance of alternative capital market products as tokenised securities under the eWpG, KAGB and AktG. The products offered are fixed-rate bonds, bonus-interest bonds, profit participation certificates, preference and ordinary shares, and tokenised units in KAGB structures (AIF or investment stock corporation, InvAG). Under the criteria above, when structured in the usual way these are financial instruments to which securities and investment law applies, not MiCAR.

For heartstocks, tokenisation is a means, not an end: what matters for documentation and supervision is the security, not the token. The subscription documents are therefore prepared under securities law; heartstocks manages the filing of the WIB or the approval of a prospectus with BaFin on behalf of the issuer. The tokens are then issued in the Nyala register and held in custody via Tangany.

According to its own figures (as of 2026), heartstocks GmbH has completed more than 5 regulatory approval processes (securities prospectus or subscription documents) since 2021, supported more than 15 tokenisation projects and structured more than EUR 200 million in volume. For KAGB structures, heartstocks works with a connected registered KVG as a partner.

For investors, regardless of the regime: there is issuer risk, the risk of total loss and liquidity risk where there is no trading venue.

This article provides general information on the legal situation and does not replace individual legal or investment advice.

More at heartstocks: Types of securities and project process FAQ about heartstocks

Frequently asked questions

Does a crypto security under the eWpG fall under MiCAR?

As a rule, no. Crypto securities are usually transferable securities and therefore financial instruments; in that case MiCAR does not apply (Art. 2(4)(a) MiCAR). The relevant definition is that of a financial instrument under Art. 4(1)(15) MiFID II.

Does the issuer's label determine the classification?

No. Under the ESMA guidelines, substance prevails over form, and the characteristics of the crypto-asset take precedence over the issuer's labels. The technological format is not a determining factor either.

Since when have the ESMA guidelines on classifying crypto-assets applied?

ESMA published guidelines ESMA75453128700-1323 in all official languages on 19 March 2025. They apply 60 calendar days after that publication. The legal basis is Art. 2(5) MiCAR.

Do I need a prospectus or a white paper for a token bond?

A token bond with interest and repayment claims is a security, so prospectus law applies rather than the MiCAR white paper. Below EUR 12 million per issuer or offeror in twelve months, a public offer has been exempt from the prospectus requirement since 5 June 2026, provided there is no notification under Art. 25 Prospectus Regulation; in Germany, a WIB under Section 4 WpPG is then generally required from EUR 100,000. Admission to trading on a regulated market requires a prospectus regardless of volume (Art. 3(3) Prospectus Regulation).

Can utility tokens be securities?

Tokens labelled as utility tokens can be securities if they additionally confer securities-type rights such as profit participation or interest and are negotiable as a class. Under ESMA Guideline 9, classification as a financial instrument takes precedence for hybrid tokens.