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Annex 1

Annex 1

ANNEX

CRITERIA FOR THE SELF-ASSESSMENT OF CRYPTO-ASSET SERVICE PROVIDERS

(a)

The nature of the crypto-asset service provider, based on the following elements:

the class designation referred to in Annex IV to Regulation (EU) 2023/1114;

the average liquidity levels, or market depth, of crypto-assets available to trade on a trading platform for crypto-assets, where applicable;

the role of the crypto-asset service provider in the financial system, including whether the crypto-asset service provider operates a trading platform for crypto assets and whether crypto-assets traded on its platform are traded on other trading platforms for crypto-assets.

(b)

Scale, by assessing the impact of the crypto-asset service provider on the orderly functioning of the markets based on the following elements, where applicable:

whether the crypto-asset service provider qualifies as significant as referred to Article 85 of Regulation (EU) 2023/1114;

the number of countries in which the crypto-asset service provider is conducting business activity;

the number of clients;

the number of active users;

the value of crypto-assets held in custody;

the volume of transactions on a trading platform for crypto-assets;

the number of transfers of crypto-assets conducted on behalf of clients;

the number of orders executed on behalf of clients.

(c)

Complexity, by assessing the following elements, where applicable:

the structure of the crypto-asset service provider in terms of ownership and governance, and its organisational, operational, technical, physical, and geographical presence;

the level of outsourcing of the crypto-asset service provider, and in particular whether any critical or important operational functions have been outsourced;

the number and type of distributed ledgers used in the execution of services;

the number of DLT network nodes the crypto-asset service provider operates on one or multiple distributed ledger(s);

the number and type of smart contracts deployed and maintained by the crypto-asset service provider;

how the private cryptographic keys of clients or other means of accessing crypto-assets are secured under safekeeping;

the use of software and hardware-based custodial wallets or wallets that secure cryptographic keys using multiple fiduciaries.

For the purposes of points (b)(iii) to (viii), the crypto-asset service provider shall use for the self-assessment the daily average over a one-year reference period.

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