Bluprynt’s Compliance Initiative in the EU

Crypto disclosure company Bluprynt aims to assist token issuers in complying with EU regulations as authorities determine how to regulate digital assets.

Background

Bluprynt CEO Dr. Christopher Brummer founded the company to simplify compliance with emerging regulations like the EU’s Markets in Crypto Assets regulation (MiCA). Dr. Brummer is also a Professor of Financial Technology at Georgetown Law and the founder of DC Fintech Week.

MiCA was approved by the European Parliament in April 2023 and is being implemented in phases. The regulation mandates token issuers to provide specific disclosures through machine-readable whitepapers, overseen by the European Securities and Markets Authority (ESMA).

Compliance Tool

Bluprynt has developed a taxonomy for MiCA to streamline compliance, which Dr. Brummer likens to software used for tax filing. The process involves token issuers submitting their information to Bluprynt, which organizes the data for issuers and their legal teams, eventually producing a machine-readable whitepaper. Dr. Brummer plans to present Bluprynt’s standards to ESMA Chair Verena Ross.

Despite ESMA releasing an initial draft taxonomy, Bluprynt contends it is incomplete. The firm states it built upon ESMA’s work to fulfill the compliance requirements, offering its taxonomy as a tool for regulators and the crypto industry.

Communication Challenges

Brummer pointed out that crypto lacks regulated communication channels with investors, unlike traditional markets that utilize quarterly reports and proxy statements. Instead, the industry often relies on platforms like Twitter, Discord, and Telegram, which hinder trust and liquidity.

With the EU insisting on white papers for industry communication, Brummer highlighted their tendency to contain technical jargon.

U.S. Regulatory Landscape

As the EU advances its crypto regulations, the U.S. is formulating its own framework. Bills have been introduced to clarify the jurisdiction for crypto assets, designating the Commodity Futures Trading Commission and the Securities and Exchange Commission as oversight bodies.

SEC Chair Gary Gensler has emphasized that existing rules are applicable to crypto and urged platforms to register, indicating that most cryptocurrencies are securities. The industry claims registration is challenging due to the incompatibility of current rules with digital assets.

Brummer remarked, “MiCA is a glass half full,” noting areas that remain unclear, including compliance documentation standards. He contrasted this with the U.S. approach, stating, “In the United States, we’re just using our hands, we don’t even have a glass.”

Bluprynt, founded in late 2023, has attracted investors including Mark Cuban, former PayPal CEO Dan Schulman, and Kroll Founder Jules Kroll, alongside institutional investors like Robinhood.