Avoiding Common MiCA Public Offer Mistakes: Case Study of MegaETH
All data and information provided within this analysis corresponds to the date of publication and may have changed since the date of publication. This analysis was published during the subscription period of the OTPC process and therefore purposefully omits any details related to the periods following the subscription period. The white paper used for reference is available here. All references are to the Markets in Crypto-Assets Regulation (2023/1114) unless otherwise stated.
This case study briefly analyses common mistakes in “Offer to the Public” (OTPC) proceedings, often referred to as “initial coin offerings” (ICO), under the Markets in Crypto-Assets (MiCA) regulation using the recent MegaETH OTPC as an example. This case study does not comment on the technical inconsistencies or wrongfully formatted sections of the white paper but focuses solely on the substantive common mistakes also present in the MegaETH OTPC.
Background
MegaETH, a low-latency Ethereum virtual machine compatible blockchain with 10ms pre-confirmation times enabled by “mini-blocks” and 1s blocktime, recently made waves with its highly oversubscribed public sale conducted through the Sonar platform.
MegaETH’s public sale used an English Auction format, aiming to sell 5% of its token supply to investors at a valuation of $1m to $999m. The offer took place between October 27 and October 30, 2025, and was conducted using USDT on the Ethereum blockchain.
Common Mistake 1: Not Safeguarding Assets Properly
Art. 10(3) of MiCA defines the obligations to the offerors of Title II type tokens. Simplifying, the raised assets must be held either at a CASP or a bank during the period that the offer is available to the public.
MegaETH received the proceeds from the sale to the Ethereum address 0xab0…461. As per aforementioned, these proceeds should have been transferred to a CASP or a bank. Therefore, the obligation to keep the raised funds in custody with a CASP was not fulfilled in practice.
Furthermore, in its white paper, MegaETH states that OKX, a Malta-based CASP, will provide custody services for the USDT raised:
“OKCoin Europe Limited (OKX), a MiCA-licensed crypto-asset service provider (CASP) authorized in Malta, will provide custody services for all USDT collected during the token offering. All funds received from participants will be held in custody by OKX from the start of the auction sale through the end of the 14-day withdrawal period, or until the token is admitted to trading, whichever is earlier. After the withdrawal period concludes and refunds (if any) are processed, the remaining funds may be transferred to wallets controlled by Superior Performance Limited for operational use.” – MegaETH OTPC White Paper, Section E.22
This, however was not the case as the previously mentioned address that received the proceeds was, in fact and ultimately, deployed by “willyham.eth”, which, to the best of our knowledge, is not an OKX affiliated entity.
Those who have followed the MiCA stablecoin regulatory processes will also notice a peculiarity in the above raise process….
Common Mistake 2: Using a Non-Compliant Asset
As assets raised through OTPC proceedings must be safeguarded by a bank or a CASP, they must, by extension, also be raised in an asset that can be safeguarded with such an entity. Definitionally, then, the asset must be another MiCA compliant asset. In the case of an OTPC conducted using stablecoins, USDT does not fulfill this definition.
Usage of a non-compliant asset reduces the consumer protections available to EU participants and also makes the effective safeguarding of raised assets impossible – legally speaking – in the EU.
“Non-compliant stablecoins – especially USDT (Tether), which continues to be traded among EU investors – may pose risks to financial stability in the EU through their global crypto market influence, raising the possibility of reserve asset fire sales in the event of a run.” – ESRB (p. 5)
OKX would’ve de facto acted against their CASP-licence if it had taken custody of USDT on behalf of MegaETH – perchance a reason for not doing so.
Common Mistake 3: Not Disclosing Marketing Communications
The whitepaper section F.8 designates https://www.megaeth.com/ as the website of the issuer.
In accordance with Art. 9(1), all marketing communications of MegaETH should be published on the above-mentioned website. None are there to be seen. Furthermore, the website does not contain a link to the white paper as per Art. 7(1)(d).
Art. 7 also stipulates the use of a clear and prominent statement, defined word-for-word, which is absent in MegaETH’s marketing communications.
Both breaches are common mistakes amongst the issuers of Title II type crypto-assets. NGUT has worked with its clients to minimise the overhead of making sufficient disclosures by introducing a centralised communications repository that is also easily accessible for non-technical persons often responsible for said communications.
Common Mistake 4: Misconfiguring Withdrawal Periods
A common misconception we hear is that users must have the right for a refund for up to 14 days after the end of an OTPC subscription period. This echoes what many are used to in digital sales; a 14 day return period for goods.
MegaETH configured a similar refund period as outlined in their X post here.
This right for refund or cancellation is technically known as “the right of withdrawal” and is defined in Art. 13. While MegaETH is not in breach of this article, they have extended the withdrawal period to a longer than is technically necessary. This reduces the working capital of the offeror and causes a redundant drag on the end-to-end execution timeline of an OTPC process.
MegaETH did not have to implement the 14 day withdrawal period because the public offer lasted only 3 days. Art. 13(5) states that the right to the withdrawal period legally ends once the offer’s subscription period ends. Therefore, the withdrawal period could’ve concluded already on October 30, 2025.
Common Mistake 5: Requiring KYC
MegaETH conducted the OTPC process through a third-party platform “Sonar”. Through this platform, MegaETH required participants to identify through a “Know-Your-Customer” process.
Requiring KYC is not necessary under MiCA and places undue burden on both the offeror and the participant. It creates additional costs to the offeror in KYC provider fees while reducing participant privacy.
We understand MegaETH aimed its offer to be made available also outside of the EU, where KYC processes may be required. However, KYC processes should not have been made mandatory to EU participants of the offer.
The primary method of KYC/AML -compliance in terms of OTPC processes relies on the custodian of the raised funds in order to avoid the unwarranted dual KYC, which would be – and is – redundant. Although in this case OKX didn’t seem to be included in the loop of KYC as they didn’t custody the funds in reality, and, therefore, an additional KYC might have seemed like a reasonable, although unnecessary, option.
About NGUT
NGUT is a Finnish regulatory and technical consultancy focused on MiCA token consultancy with its specialty in offer to the public (OTPC) and admission to trading (ATTR) proceedings. Founded by the team behind the EU's first MiCA-compliant stablecoin, NGUT enables Web3 businesses to thrive under EU regulations.