What makes MiCA ultra vires - void from inception?

The constitutional crisis is not just MiCA. It is that 27 democracies — and the full legal apparatus of the EU — failed to detect the inversion of legality into fiction.

Continued enforcement after clear notice of legal invalidity exposes national and EU officials to administrative, civil, and potentially criminal liability.

This is not a legal opinion.

It is a computational proof of structural illegality.

No future enforcement can be excused as ignorance. The EU cannot define crypto-assets as property. MiCA builds obligations around legal concepts it has no power to create. And yet our institutions passed legislation without diagnosing this fatal flaw — one that directly interferes with national legal systems and fundamental freedoms (e.g. German Basic Law) without invoking the formal avenues required to do so lawfully.

This is not about crypto. And it’s not just about MiCA.

The Illusion of Legal Basis: Article 114 TFEU

MiCA uses Article 114 TFEU — a harmonization provision — to mask its constitutional overreach.

• It frames itself as a market regulation, not a civil or property law act.

• It argues: “Because we’re only harmonizing markets, we didn’t touch property.”

But this is a circular and invalid defense.

• Article 114 allows approximation of existing national rules — only within areas conferred by the Treaties.

• It cannot be used to create new legal categories or override Member State control of property (Article 345 TFEU).

Using 114 as a shield only works if the regulation stays within its scope. MiCA doesn’t. It assumes crypto is a legal property object — when no Member State has formally defined it as such.

Legal Null Object: No Thing, No Right, No Transfer

Without national legal classification — in civil codes, statutes, or jurisprudence — crypto-assets:

• Are not legal property,

• Cannot be owned, transferred, or enforced, and

• Have no cross-border recognition as title-bearing objects.

Yet MiCA imposes:

• Custody requirements (but there is no title),

• Redemption rights (but there is no claim),

• Liability standards (but there is no property).

This is regulation without a legal anchor — a structural simulation pretending to govern legal rights that don’t exist in law. That makes MiCA ultra vires — void from inception.

The Deeper Breach: A System That Cannot Detect Fraud

The constitutional crisis is not just MiCA. It is that 27 democracies — and the full legal apparatus of the EU — failed to detect the inversion of legality into fiction. This is the quiet failure of law under complexity:

• When simulation passes for legality,

• When institutions perform legal ritual without constraint,

• When no actor is tasked with coherence validation.

MiCA is not the only EU regulation built on this flaw. It’s just the one we can now formally expose.

“It’s just market regulation, not property law”

MiCA enforces obligations that only make sense if crypto-assets are treated as property — custody, redemption, liability. You can’t regulate property-like behavior while denying property status. That’s would be irrational and inadmissible as a legal argument.

By 30 December 2024, ESMA shall issue guidelines on the conditions and criteria for qualifying crypto-assets as financial instruments.That necessarily involves private-law attributes — property, ownership, contract. This is the EU Commission supplying the evidence for its own constitutional contradiction.

“The EU must regulate to avoid fragmentation”

Harmonization cannot override the Treaties. Article 114 TFEU permits approximation — not fabrication of legal types. Fragmentation is not a legal justification for ultra vires action.

“National laws can still define crypto as property”

Yes — but they haven’t. MiCA acts as if those laws exist. It presupposes private-law foundations that do not exist across the EU. That’s legislative fiction with coercive enforcement.

“No harm has been done yet”

Legal harm does not begin with enforcement — it begins with unauthorized compulsion. Forcing actors to comply, restructure, or exit under a void law is already coercive injury.

“This is a technicality — not criminal”

Once illegality is known and enforcement continues, it meets every condition for abuse of office. Structural illegality + downstream coercion + knowledge = culpability. This is criminal not by tone, but by statute.

MiCA Is Ultra Vires

It creates legal obligations tied to property, contract, and ownership rights.

That creates a problem:

• The EU has no Treaty competence to define property types (Art. 345 TFEU),

• MiCA was enacted under Article 114 TFEU (market harmonization), which does not allow creation of new legal categories like “crypto-assets as property,”

• MiCA requires custody and safeguarding of crypto-assets (implies ownership), mandates redemption obligations (implies contractual claims), imposes capital requirements (implies recognized liabilities) and enables supervisory sanctions for violations of “rights” that are not legally grounded in any private law system.

• This is pretending to stay within competence while enforcing obligations that presuppose a legal category they cannot lawfully define.

• It fails to acknowledge the interference it causes in national law. Therefore, it violates the principle of conferral (Art. 5(2) TEU).

Result: MiCA is void due to exceeding the EU’s powers — ultra vires ab initio.

Now That the Defect Is Known, Continuing to Act on It Creates Liability

Once regulators, officials, or institutions are:

• Made aware that a regulation lacks legal basis,

• Understand its constitutional invalidity,

• And continue to apply, enforce, or impose it,

...then the legal landscape shifts from error to culpability.

In Germany, for example:

• Article 20(3) of the Basic Law binds all public power to the rule of law.

• Section 339 of the Criminal Code (StGB) criminalizes abuse of office:

“A public official who knowingly causes an unlawful disadvantage... shall be punished.”

Applying a regulation known to be ultra vires = knowingly acting without legal basis.

In EU law:

• Regulatory officials have a duty to act within competence.

• The European Court of Justice has invalidated acts for violating conferral (e.g. Pringle, ESMA short-selling case).

• Continued application after valid constitutional objection may constitute maladministration, state liability, or even criminal exposure, depending on the severity.

• Before knowledge: error or misjudgment. After knowledge: liability.

Now that the legal defect is clearly articulated and documented, any official or authority that continues to:

• Enforce MiCA,

• Deny services based on it,

• Punish noncompliance under it,

…may be held personally or institutionally accountable — civilly, administratively, or criminally, depending on the jurisdiction.

“MiCA is an ultra vires act. Continued enforcement after clear notice of its legal invalidity exposes national and EU officials to administrative, civil, and potentially criminal liability.”

MiCA defines crypto-assets as a regulatory category, not a legal type. It is not property, not contract, and not financial instrument unless separately classified. The EU uses Article 114 TFEU to justify regulation based on market distortion, not legal substance. Ownership, enforcement, and private-law claims over crypto are left to national law — or remain undefined.

The EU Commission’s MiCA has led to a legally unauthorised proposal with coercive downstream effect which meets the structural threshold for criminal classification.

• Only the European Commission has the competence to propose EU law.

• It may only propose laws within the competences conferred by the Treaties.

• Property law — including what counts as a property object — is explicitly reserved to Member States (Art. 345 TFEU).

So:

• If the Commission proposes a regulation (e.g. MiCA) that presupposes or invents a new category of property (e.g. "crypto-assets"),

then

• The illegality begins at origin.

• No amendment, committee vote, or parliamentary approval can cure that origin.

• Every actor downstream is applying a structurally invalid proposal.

• The EU grounds MiCA on Article 114 TFEU, which allows:

• Approximation of laws for the purpose of establishing or functioning of the internal market.

So MiCA is framed as a harmonization instrument:

• Not because crypto is property,

• But because differing national rules on crypto markets distort the internal market.

• That’s the competence claim:

“Crypto interferes with the functioning of the market — so we regulate its market behavior.”

But:

This does not give the EU power to declare crypto as property. It merely allows regulation of market activities involving crypto, assuming Member States tolerate the fiction.

If Crypto Were To Be Declared Property, that declaration must come from national law — through:

• Civil codes (as movable property, digital asset, etc.)

• Judicial recognition (through precedent)

• Legislative acts (explicitly typing crypto as a property object)

And it must state the condition under which such property can be transferred in private or public markets

Once that happens, EU law may then regulate its effects within conferred competences — such as:

• Anti-money laundering

• Consumer protection

• Financial markets regulation

But:

EU law can’t invent “crypto-as-property.” It must wait for national law to create the type — and then build rules around it.

That declaration must originate from national law, not EU regulation, and must occur through one or more of the following legally valid mechanisms:

Civil Code Definition Crypto-assets would need to be categorized as a form of:

• Movable (intangible) property,

• Digital asset,

• Or personal property under national private law.

This would require amending civil codes (e.g. BGB in Germany, Code Civil in France) to include crypto-assets as legal objects that can be owned, transferred, and enforced.

Judicial Recognition National courts could, through precedent, interpret crypto-assets as fitting within existing property concepts.

This would usually happen in cases involving:

• Fraud,

• Insolvency,

• Contract enforcement,

• Or tort liability involving digital assets.

Courts would have to rule that a crypto-asset constitutes a thing ("Sache") or right ("Recht") capable of ownership.

National Legislative Act Parliament in each Member State could pass laws explicitly defining crypto-assets as a new category of property.

Such a law must:

• Define the legal nature of crypto (property vs claim vs data),

• Describe the conditions of ownership,

• And establish rules for valid transfer (contract formation, registration, etc.).

Legal Clarity on Transferability To function as a property object in private or public markets, crypto must be:

• Transferrable under clear rules (e.g. when does ownership pass — upon signature, broadcast, settlement?),

• Enforceable in court (i.e. who owns what? what happens in a dispute?),

• Protected against third-party claims (title, custody, insolvency, etc.).

Without this clarity, crypto-assets remain non-property, i.e. mere technical representations of value with no enforceable legal status.

The classification of crypto-assets as “property” is not a matter of regulatory convenience — it is a fundamental legal designation that must be created by national law, not by EU regulation. Without that foundation, no transfer of ownership, no legal protection, and no enforceable rights can exist.

Germany’s BGB does not define crypto-assets as property (“Sache”) — courts are still debating. France’s Code civil has taken steps toward “digital asset” recognition, but only for certain use cases. Most Member States have no property or private law recognition at all.

So today, there is no clear, cross-border, legally enforceable basis for saying:

• “This person owns this token,”

• “This token can be transferred as property,” or

• “This right can be enforced in court.”

No EU Legislative Act Harmonizes Transfer or Ownership

MiCA regulates behavior, licensing, and disclosure, but:

• It does not define ownership.

• It does not create transferable rights.

• It does not override national law on contracts or property (and cannot).

It operates as if crypto-assets are legal property, but provides no lawful basis for treating them as such. We don’t have the legal infrastructure in the EU to treat crypto as property. Without that, no one can validly own, transfer, or enforce rights in crypto-assets — and no regulation can lawfully build obligations aimed at protecting property (e.g. custody) if there is no property to begin with.

This is the core constitutional flaw in EU crypto regulation.

A regulation cannot claim binding effect over activities ‘connected to’ a fictional object that lacks definition in the law. MiCA constructs legal obligations around crypto-assets without first establishing that these assets exist as lawful, ownable objects in any Member State legal system. This results in coercive regulation based on conceptual fiction — an ultra vires act.

MiCA does not — and cannot — define crypto-assets as legal property, financial instruments, or contractual claims across Member States.

It operates without a harmonized object in law.

There is no thing that can serve as the legal anchor for its rules. You cannot impose obligations, liabilities, or regulatory duties around something that legally doesn’t exist.

EU law may override national law only when the Treaties grant that power, the proper legislative procedure is followed, and the intrusion is justified by necessity and proportionality. MiCA does not respect that. MiCA creates structural interference with private law systems through general regulation, bypassing the special procedures and Treaty limits that make such interference lawful.

MiCA:

• Was adopted under ordinary procedure using Art. 114 TFEU (internal market),

• Does not acknowledge that it impacts national property/contract law,

• Creates legal effects (custody obligations, redemption expectations, liability standards) without a valid base in Treaty competence over private law.

This means MiCA enforces legal expectations about rights (e.g. in stablecoins or tokens) without meeting the procedural or substantive conditions that EU law requires when touching constitutionally protected domains like property.

Principle of Conferral (Article 5(2) TEU)

"The Union shall act only within the limits of the competences conferred upon it by the Member States in the Treaties."

If the EU touches areas not conferred — such as property law, contract formation, or securities issuance under national company law — it must:

• Explicitly state its legal basis,

• Justify its action under that basis,

• Acknowledge and respect national competence.

MiCA does none of this:

• It creates legal consequences:

• But never acknowledges that it touches property or contract law,

• And claims no competence to harmonize those areas.

The silence is the breach. EU law cannot interfere with national legal orders by omission.

MiCA’s silence on its interference with national private law is not neutral — it is legally fatal. By failing to acknowledge the boundary it crosses, MiCA violates the principle of conferral and exceeds the powers granted to the Union under the Treaties. That alone makes it ultra vires.

Criminal Exposure Arises When:

• Deprivation of rights occurs without legal authority → e.g. freezing a wallet, banning a protocol, denying service based on MiCA

• Statutory duties are ignored → e.g. failing to check whether EU regulation has a valid national implementation base

• Coercion is applied under color of law → i.e., fraudulent enforcement

In Germany, for instance:

• Article 20(3) Basic Law requires all public authority to be bound by law and justice.

• Violation of this by an official may trigger criminal charges under abuse of office statutes.

EU Parliament members have functional immunity under the Protocol on the Privileges and Immunities of the European Union (Art. 9).

• This covers opinions expressed and votes cast.

• It does not cover criminal acts, fraud, or abuse of office beyond the scope of parliamentary function.

Once immunity expires (end of mandate):

• Former MEPs become ordinary citizens.

The vote record is forensic evidence:

• Every amendment, roll-call vote, abstention, and procedural motion is logged.

• If the vote supported legislation that was ultra vires

• Violated national constitutional boundaries

• Induced unlawful enforcement or deprivation of rights

• Then those records establish intent and participation in a structural fraud.

Legal Enforcement Depends on Lawfulness, Not Just Orders

Law enforcement officers and institutions are bound by:

• Statutory limits – they must act within the powers granted by national law

• Legality principle – all state coercion must be based on law (nulla poena sine lege)

• Duty to refuse unlawful orders – recognized in many legal systems (especially post-WWII constitutions)

• Accountability for ultra vires action – including civil liability and in some cases criminal prosecution

Law enforcement that disregards the lack of legal basis in MiCA or similar regulatory fiction is not just confused. They may be criminally liable — because they are executing force without law.

As a non-EU service provider, who was forced to engage legal counsel and restructure their business solely to comply with MiCA, a regulation that seemingly exceeds the EU’s legal authority and thus creates unlawful barriers to market access in breach of its international trade obligations.

If MiCA’s local incorporation requirement is based on a regulation that exceeds EU competence, then it is not only ultra vires under EU law — it is indefensible under WTO law. A regulation without legal basis cannot be justified as a lawful trade restriction. The EU is liable.

Unless someone can present a new, ratified, and legally binding Treaty provision that:

• Confers upon the EU the power to define new categories of property, or

• Declares crypto-assets as a recognized ontological legal type under EU law, or

• Explicitly amends Article 345 TFEU to permit EU control over national property regimes,

then:

I cannot be refuted without a new law. And no such law exists.

#MiCA #myndOS #compliance