When the issuer is asked about conflicts: what to do first
When a counterparty, an investor, or a competent authority asks the issuer about a conflict of interest, the first step is not to answer the question. The first step is to open a conflict file: name the parties, describe the interest at stake, freeze the affected activity, and route the question to compliance before any reply leaves the organisation.
Basis
Regulation (EU) 2023/1114 (MiCA) requires issuers to identify, prevent, manage and publicly disclose conflicts of interest connected with the issuance and trading of a crypto-asset. The regulation has applied since 30 December 2024. As a regulation rather than a directive, it binds the issuer directly, without a national transposition act sitting in between.
Practical consequence
A conflict rarely stays inside the issuer's own file. If the conflict touches a transfer of the token between wallets or accounts, the information that must accompany that transfer falls under Regulation (EU) 2023/1113 (TFR). A single question about a conflict can therefore open two separate obligations at once: the disclosure duty under MiCA, and the information-accompanying-transfer duty under TFR, if a transfer is part of the same fact pattern.
What to do
The order matters more than the speed. Answering before the file is closed usually creates a second problem on top of the first one.
- The compliance officer opens a conflict file the same day the question arrives, naming every party and the interest involved.
- The issuer suspends the specific activity affected by the conflict — not the whole token programme — until the file is complete.
- The compliance officer records any personal data collected about the parties in line with the Privacy notice: two roles, two bases and what to, before the file leaves the compliance function.
- The legal team drafts a disclosure statement matching the conflict-handling obligation in Regulation (EU) 2023/1114 (MiCA).
- The board reviews the file and the draft disclosure, then approves it or sends it back for correction.
- The issuer publishes the disclosure through the channel already used for the white paper, and only then answers the original question.
Who decides
Two different actors look at the same file for two different reasons. The table separates what each one checks.
| Question | Answer |
|---|---|
| Who reviews the file first | The issuer's own compliance function, before any external body sees it |
| Who can request the file | The competent authority responsible for the issuer's home Member State under Regulation (EU) 2023/1114 (MiCA) |
| On what evidence | The conflict file, the disclosure text, and the record of the suspended activity |
| Which deadline is running | The deadline set by the authority's own review procedure, published by that authority — no single number applies to every case |
Forks
Three situations lead to three different next steps.
- If the conflict surfaces before the white paper is published, the disclosure goes into the white paper itself, and the question is answered by pointing to that document.
- If the conflict surfaces after issuance, the issuer publishes a supplementary disclosure and notifies existing holders through the channel already used for ongoing communication.
- If the party asking is a counterparty rather than an authority, the answer stays factual and stops short of any assessment of fault — that assessment belongs to the authority, not to the issuer.
Limits and sources
This page does not establish who a counterparty actually is, what a document produced by that counterparty actually says, or which jurisdiction applies once a party in the conflict is based abroad. Those are separate questions, each answered by its own report rather than by a conflict-handling procedure.
A Counterparty report switzerland establishes what can be said about a Swiss party named in the conflict file.
A Document report switzerland establishes what can be said about a document produced by that party.
A Jurisdiction in Switzerland: what can be established report establishes which forum and which rules apply once the counterparty's location is confirmed.
Checked: Regulation (EU) 2023/1114 (MiCA), applicable since 30 December 2024; Regulation (EU) 2023/1113 (TFR), applicable from the same date. Neither text fixes a universal deadline for a single conflict question — the applicable timetable comes from the competent authority's own published procedure.
Related situations
A change in token supply raises a related but separate set of questions. See When a burn changes the supply: what to do for the first steps in that scenario.
FAQ
What is the first step when the issuer is asked about conflicts?
Open a conflict file before replying. Name the parties, describe the interest, and suspend the affected activity. Answering first and documenting later reverses the order Regulation (EU) 2023/1114 (MiCA) expects from an issuer handling a conflict of interest.
Which deadline is already running?
The moment the question is asked, a review clock starts on the authority's side, not on the issuer's side. Regulation (EU) 2023/1114 (MiCA) does not set one fixed number for this step; the applicable timetable comes from the competent authority's own published review procedure, and the issuer cannot extend it unilaterally.
Who decides, and on what evidence?
The competent authority responsible for the issuer's home Member State decides, drawing on the conflict file, the disclosure text, and the record of the suspended activity. The issuer's compliance function makes the first assessment; the authority reviews it afterwards, on request or as part of ongoing supervision.