Inside information

What is inside information?

Inside information is defined in Article 87(1) of the MiCA Regulation. According to the definition, inside information refers to the following types of information:

• Information of a precise nature, which has not been made public, relating, directly or indirectly, to one or more issuers, offerors or persons seeking admission to trading, or to one or more crypto-assets, and which, if it were made public, would likely have a significant effect on the prices of those crypto-assets or on the price of a related crypto-asset.
• For persons charged with the execution of orders for crypto-assets on behalf of clients, it also means information of a precise nature conveyed by a client and relating to the client’s pending orders in crypto-assets, relating, directly or indirectly, to one or more issuers, offerors or persons seeking admission to trading or to one or more crypto-assets, and which, if it were made public, would likely have a significant effect on the prices of those crypto-assets or on the price of a related crypto-asset.

Preciseness and relevance of inside information

Article 87(2) defines the criterion of preciseness of inside information, which states that information shall be deemed to be of a precise nature where it:

• indicates a set of circumstances or an event which exists or has occurred, or which may reasonably be expected to come into existence or to occur, and
• is specific enough to enable a conclusion to be drawn as to the possible effect of that set of circumstances or event on the prices of crypto-assets.

According to the criterion related to significance in Article 87(4) of the MiCA Regulation, information which, if it were made public, would be likely to have a significant effect on the price means information that a reasonable holder of crypto-assets would be likely to use as part of the basis of the holder’s investment decisions.

Prohibitions on use and disclosure of inside information

If you have received inside information, you are subject to the prohibition provided in Article 89 of the MiCA Regulation to acquire or dispose of the crypto-assets concerned by the information. You may not advice another person to acquire or dispose of the crypto-assets, either. The abovementioned prohibitions also apply to the cancellation or modification of an order.

Unlawful disclosure of inside information

As a general rule, disclosure of inside information is prohibited. However, disclosure of inside information is allowed if it is made in the normal course of the exercise of the disclosing person’s employment, profession or duties. Inside information may be disclosed only to the extent that it is necessary for the exercise of the disclosing person’s own professional duties.