Madrid 2.0

The Madrid 2.0 DARTE session took place on October 7th, 2025, at the historic Palacio de Santoña, in collaboration with the European Commission, Project Catalyst, MERGE Madrid, Sumsub, and TRM Labs. As the second edition held in Spain, this session built upon prior conversations to focus more deeply on cross-border operational challenges in implementing MiCAR and adapting legal frameworks to evolving crypto market realities.

The session featured three core discussions: Katherine Cloud (Sumsub) addressed practical gaps in AML/KYC compliance across Member States under MiCAR and the Digital Identity framework; Luiza Castro Rey (FiO Legal) examined the current regulatory blind spots around market abuse prevention involving crypto-assets, highlighting the lack of operational standards for PPAETs; and Juan Ignacio Ibáñez (MiCA Crypto Alliance) presented a working case study on the legal classification of Liquid Staking Tokens (LSTs), developed through multi-jurisdictional consultations and academic research.

The Madrid 2.0 edition reaffirmed DARTE’s commitment to advancing legal clarity and regulatory interoperability by bringing together legal practitioners, compliance experts, and public authorities to co-develop realistic, principle-driven solutions for Europe’s emerging digital asset ecosystem.

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Cross-Border Implementation of MiCAR KYC/AML Standards

CASPs operating across EU borders face significant challenges in meeting MiCAR’s anti-money laundering and identity verification obligations. Differing national document standards, privacy laws, and fragmented monitoring requirements make it difficult to implement consistent and auditable compliance systems. Manual processes introduce delays, regulatory risk, and operational inefficiencies. Industry experts proposed scalable solutions such as AI-powered identity verification, proportional monitoring, and cross-border interoperability frameworks.

Call to Actions

Form an EU-wide working group of CASPs, regulators, and regtech providers to propose technical guidelines for AI-based KYC/AML systems under MiCAR.
Define baseline interoperability principles to allow jurisdictional recognition without full standardization of compliance tools.
Promote proportional monitoring obligations that balance risk with operational capacity, especially for SMEs.

Prevention and Prohibition of Market Abuse Involving Crypto-Assets

Call to Actions

Market abuse detection under MiCAR Title VI remains poorly adapted to crypto market realities. Challenges include 24/7 trading, cross-chain asset flows, pseudonymity, and off-chain opacity. MiCAR offers limited guidance on employee wallet declarations, insider list requirements, and the definition of “inside information.” These gaps create legal uncertainty for compliance teams and limit enforcement capabilities. Participants emphasized the need for tailored tools that reflect crypto’s structural differences while maintaining market integrity.

Establish a crypto-specific insider trading compliance taskforce to define operational standards, including wallet declaration protocols and simplified insider lists.
Clarify the treatment of protocol vulnerabilities and on-chain disclosures under the “inside information” definition in MiCAR through ESMA Q&A or joint guidelines.

Liquid Staking Token (LST) Classification Framework

LSTs provide liquidity on staked assets but defy classification under MiCAR’s current taxonomy. The core challenge is that LSTs derive from financial instruments (staked tokens) but lack consistent characteristics across issuers and chains. The industry-led LST taxonomy initiative—launched in response to the Vienna 2.0 discussions—leverages academic research to propose a classification matrix that balances economic function, governance exposure, and convertibility. The framework aims to reduce liability risk and support CASP compliance in MiCAR licensing.

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