MiCA investor protection at a glance
| Protection | What MiCA requires | Article |
|---|---|---|
| Honest dealing | Act honestly, fairly and professionally in the best interests of clients | 66(1) |
| Clear information | Fair, clear and not misleading, with marketing identified as such | 66(2) |
| Risk warnings | Warn clients of the risks of crypto-asset transactions | 66(3) |
| Published fees | Pricing, costs and fees policies in a prominent place on the website | 66(4) |
| Your crypto kept apart | Safeguard ownership rights and prevent use for the firm's own account | 70(1) |
| Your euros kept apart | Placed with a bank or central bank by the next business day, in separate accounts | 70(3) |
| Segregation in insolvency | Custodied crypto legally segregated, so the firm's creditors have no recourse to it | 75(7) |
| Liability for losses | The custodian is liable for losses from incidents attributable to it, up to market value | 75(8) |
| Complaints | Free, published procedure with a template and timely, fair handling | 71 |
| Conflicts of interest | Identify, prevent, manage and disclose conflicts | 72 |
Source: Regulation (EU) 2023/1114 (MiCA).
MiCA investor protection if an exchange fails
The collapse of large crypto platforms in the past left customers as unsecured creditors, waiting years for a share of what was left.
MiCA addresses this by requiring crypto-assets held in custody to be legally segregated from the exchange's estate, so that its creditors have no recourse to them, in particular in insolvency.
Client euros must sit in separately identifiable accounts at a bank or central bank.
These rules aim to keep your assets yours if the exchange fails, but recovering them can still take time, and the outcome depends on how well the firm kept its records.
What MiCA investor protection does not cover
- Price falls: MiCA does not protect the value of any crypto-asset.
- Deposit guarantees: crypto-assets are not covered by deposit guarantee schemes.
- Investor compensation: crypto-assets are not covered by investor compensation schemes.
- Your own mistakes: a transfer to a wrong address or network is not the exchange's liability.
- Scams outside the system: money sent to an unauthorised platform is outside MiCA's protection.
- Account takeover through your credentials: whether the exchange is liable depends on the facts and the terms.
MiCA investor protection and advice
If a firm gives you personal advice on crypto-assets or manages a portfolio for you, MiCA requires it to assess your knowledge, experience, objectives, risk tolerance and ability to bear losses.
It must also warn you that crypto-assets can fluctuate, can be lost in full or in part, may not be liquid and are not covered by deposit guarantee schemes.
The financial readiness test asks many of the same questions for your own use.
Your part of MiCA investor protection
- Use authorised firms only: check them in the ESMA register.
- Read the fee policy: MiCA requires it to be public.
- Secure your account: with the account security check.
- Keep records: of deposits, trades and withdrawals.
- Complain in writing: using the exchange's template if something goes wrong.
- Invest only what you can lose: no regulation protects the price.
MiCA investor protection: before and after
| Topic | Before MiCA (in many countries) | Under MiCA |
|---|---|---|
| Authorisation | Often only an anti-money-laundering registration | Full authorisation with conduct rules |
| Client assets in insolvency | Often unclear | Custodied crypto legally segregated from the firm's estate |
| Client euros | Varied | With a bank or central bank, in separate accounts |
| Fees | Sometimes hard to find | Policies published prominently |
| Complaints | Varied | Free, published procedure with a template |
| Supervision across borders | National patchwork | Home regulator plus passport notifications |
General comparison; national rules before MiCA differed between countries.
MiCA investor protection: the custody agreement
MiCA requires a custodian to conclude an agreement with clients that specifies its duties and responsibilities.
That agreement, usually part of the terms of use, is worth reading for what happens in case of incidents, how assets are held and what the provider is liable for.
The Reliability Score does not rate terms of use, so reading the custody terms yourself remains important.
MiCA investor protection: liability in practice
A custodian is liable for losses caused by incidents attributable to it, up to the market value of the lost crypto-assets at the time of the loss.
Incidents not attributable to the custodian, for example events outside its control, are treated differently, and the details are in the regulation and the custody agreement.
Losses caused by your own actions, such as sharing a password or sending to a wrong address, are generally not the custodian's liability.
MiCA investor protection: conflicts of interest
Exchanges can have conflicts, for example when they trade for their own account, list their own tokens or earn more from some products than others.
MiCA requires firms to identify, prevent, manage and disclose such conflicts, and to publish their policies.
Reading a firm's conflict of interest disclosure is a good way to understand how it makes money.
MiCA investor protection: your checklist
- The firm is in ESMA's register.
- You have read the fee policy and the custody terms.
- You keep only what you need on the platform.
- Your account security is strong.
- You know how to complain.
- You accept that no rule protects the price.
MiCA investor protection: the articles behind it
| Article | Protection |
|---|---|
| 66 | Act honestly, fairly and professionally; fair, clear and not misleading information; risk warnings; published prices, costs and fees |
| 70 | Safeguard clients' ownership rights, especially in insolvency; client funds placed with a credit institution or central bank in separately identifiable accounts |
| 71 | Published, free complaints procedure with a template and fair investigation |
| 72 | Identify, prevent, manage and disclose conflicts of interest |
| 75 | Custodied crypto legally and operationally segregated; liability for losses from incidents attributable to the custodian, capped at market value at the time of loss |
| 81 | Suitability assessment and risk warnings when giving advice or managing portfolios |
Summaries of Regulation (EU) 2023/1114 on EUR-Lex.
MiCA investor protection: a hypothetical failure
Hypothetical example: an authorised exchange that held clients' coins in custody becomes insolvent.
- Coins held in custody must be legally segregated from the exchange's own estate, so its creditors should have no recourse to them.
- Client euro balances must have been placed in separately identifiable accounts with a credit institution or central bank.
- Returning assets can still take time, depending on the insolvency process.
- No deposit guarantee or investor compensation scheme covers crypto-assets.
Hypothetical scenario to illustrate the rules; real cases depend on the facts and national insolvency law.
MiCA investor protection: what each side is responsible for
| The provider | You |
|---|---|
| Clear information on costs and risks | Reading it before you buy |
| Safe custody and segregation | Protecting your login and 2FA |
| A fair complaints procedure | Keeping records and complaining in time |
| Managing conflicts of interest | Choosing how much risk to take |
MiCA investor protection: questions readers ask
Am I protected if I am tricked into sending coins to a scammer? MiCA rules bind the provider; a transfer you authorised yourself is very hard to reverse, which is why scam awareness matters.
Does MiCA protect coins in my own wallet? No; MiCA regulates service providers, not wallets you control yourself.
Are stablecoins protected like bank deposits? No; MiCA gives holders of e-money tokens a redemption right against the issuer, but they are not deposits.
MiCA investor protection: risk warnings you should see
MiCA requires providers to warn clients of the risks associated with transactions in crypto-assets.
White papers must also state that the crypto-asset is not covered by investor compensation schemes or deposit guarantee schemes.
When advice is given, the adviser must warn that crypto-assets may fluctuate in value, may be lost in full or in part, may not be liquid, and are not covered by deposit guarantee schemes.
If a provider's website or app shows no risk warnings at all, that is a reason to look more closely at the provider.
MiCA investor protection: a pre-deposit check
- Authorisation: confirmed in the register, with your country covered.
- Fees: the fee schedule found on the public website.
- Custody: the custody terms describe how your coins are held.
- Complaints: the complaints procedure and template are published.
- Security: 2FA set up before your first deposit.
A provider that makes these items hard to find is giving you useful information about how it treats customers.
Repeat the check whenever the provider changes its terms or legal entity.
Keep copies of the terms you agreed to, since providers update them over time.
Frequently asked questions
Is my crypto protected under MiCA?
MiCA requires authorised exchanges to keep client crypto separate from their own assets and to be liable for losses caused by incidents attributable to them. It does not protect against price falls.
What happens to my crypto if a MiCA exchange goes bankrupt?
Crypto held in custody must be legally segregated from the exchange's estate, so its creditors have no recourse to it. Recovery can still take time.
Is there a deposit guarantee for crypto under MiCA?
No. Crypto-assets are not covered by deposit guarantee schemes or investor compensation schemes.
Is the exchange liable if my account is hacked?
MiCA makes custodians liable for losses from incidents attributable to them. Whether a specific hack is attributable to the exchange depends on the facts and the terms.
Do MiCA exchanges have to publish their fees?
Yes. MiCA requires their pricing, costs and fees policies to be publicly available in a prominent place on their website.
Sources
- Regulation (EU) 2023/1114 (MiCA), Articles 6(5), 66, 70, 71, 72, 75 and 81
Every figure on this page is checked against the ESMA register, the exchange's own terms and fee pages or another primary source, and the sources are listed above. Editorial policy · How we rate