Understanding MiCA Sustainability Compliance: How Zumo’s New Feature Simplifies the Process

Zumo, the B2B digital assets infrastructure provider, has introduced a new feature that will change the way crypto-asset service providers (CASPs) in the European Union (EU) manage sustainability compliance. The new addition to Zumo’s Oxygen product helps CASPs adhere to the upcoming sustainability reporting requirements under the Markets in Crypto-Assets (MiCA) regulation.

MiCA, aims to create a consistent framework for crypto-assets across the EU. It includes a range of obligations for CASPs. One such obligation, which many CASPs appear to have overlooked, pertains to the new sustainability indicators drafted by the European Securities and Markets Authority (ESMA). These indicators measure the environmental impact of crypto-assets offered by CASPs, a requirement that must be addressed by 30 December 2024. Industry data suggests that over 80% of CASPs are unaware of this looming deadline, placing them at risk of substantial fines.

MiCA Article 66 mandates that CASPs — including exchanges, brokerages, custodians, and trading firms — operating within the EU or planning to provide services to the EU must have website disclosures detailing the environmental impact of their crypto-assets. Failure to meet this requirement could result in penalties of at least €5 million or 5% of the company’s annual turnover.

Zumo’s Innovative Solution

Zumo’s latest feature, integrated into the Oxygen product, is designed to help CASPs effortlessly meet these new sustainability reporting requirements. The solution provides access to MiCA-compliant sustainability metrics for listed crypto-assets. It leverages high-quality data from the Crypto Carbon Ratings Institute (CCRI), a strategic partner of Zumo, to  build upon Zumo’s ongoing efforts to align digital asset activities with net-zero principles.

One of the key benefits of this new feature is the ability to auto-generate MiCA-compliant website disclosure reports, making it easier for CASPs across the EU to stay on top of their sustainability obligations.

Nick Jones,  Founder and CEO of Zumo said “MiCA’s sustainability requirements are going live to a tight deadline, and bring with them complex data questions as well as potentially hefty fines.[…] It’s become clear that CASPs across Europe simply aren’t ready. In response, we’ve taken another important step on our sustainability journey to add the indicators that will enable service providers to comply with current and future sustainability compliance requirements. With our MiCA solution, CASPs will be able to access a single interface that helps them cut through all the complexity associated with pulling data together, formatting an appropriate template, and providing the output that ESMA is looking for.”

A Pioneer in Sustainable Digital Assets

Zumo has established itself as a leader in sustainable digital assets, with a commitment to shaping a future where financial institutions can operate within a sustainable, compliant framework. The company’s efforts have been recognised by prestigious awards such as the Fintech Finance Awards, the City AM Awards, and the Scottish Financial Technology Awards.

Beyond this, Zumo was a member of the World Economic Forum’s Crypto Sustainability Coalition, which explored how blockchain technologies can support climate action. The company also signed the Abu Dhabi Sustainable Finance Declaration and co-founded the Emerging Technologies Sustainability Taskforce (ETST).

Photo by Kervin Edward Lara: https://www.pexels.com/photo/white-wind-turbines-on-gray-sand-near-body-of-water-3976320/