EU pushes hard for crypto regulation


The regulatory front for cryptocurrencies has been difficult in recent weeks, as EU regulators seek information on all transactions.

As acceptance of cryptocurrencies grows, so does the push for accountability.

On Monday, April 14, the EU’s Economic and Monetary Affairs committee adopted a new position on the rules on crypto assets with 31 votes in favor, 4 against and 23 abstentions. Its objective is to increase user confidence and promote the development of alternative payment methods and digital services.

MEPs’ key provisions for those who issue and trade crypto assets (including asset-referenced tokens and e-money tokens) cover transparency, disclosure, authorization and oversight of transactions.

The EU believes this will help consumers “be better informed about risks, costs and charges.”

Additionally, the text includes measures against market manipulation to prevent money laundering, terrorist financing and other criminal activities; this means that there will be no more anonymous transactions.

The European Union announced new rules requiring all crypto transactions to disclose the parties involved in the transaction. The legal framework aims to support market integrity and financial stability by regulating public offerings of crypto assets.

EU press section dorota kolinska he explained, “crypto assets, including cryptocurrencies, are not issued or guaranteed by a central bank or public authority. They are currently outside the scope of EU law. This creates risks to consumer protection and financial stability, leading to market manipulation and financial crime. The bill differentiates between crypto assets, asset-referenced tokens (ART), stablecoins, and electronic money tokens used primarily for payments.”

Additionally, the EU is introducing a more comprehensive framework to regulate all financial service providers and issuers of crypto assets in the EU called My car.

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These laws may have been enacted due to the rise in financial crime.

For example, cryptocurrencies have been the standard means of payment for dark web platform users since the inception of the first major marketplace in 2011, Silk Road.

Dark web transactions are estimated to total €1.5bn ($1.7bn) in 2020; to hide their ill-gotten gains, criminals must use cryptocurrencies and elude cryptocurrency tracking, according to Europol.

Rejection from the crypto community

Leaders of the crypto community condemned the new rules, integrating themselves into the complex policy-making system of the European Union.

Diana Biggs, chief strategy officer at DeFi Technologies, explains that there will be negative consequences, “while the proposed regulations are intended to increase user confidence in the digital asset market and support the development of blockchain technologies, it will achieve precisely the opposite. These proposals, if adopted, will make Web3 unduly burdensome for European citizens and businesses and will have unintended negative consequences for citizens’ privacy. Europe risks missing out on this next iteration of the Internet, as it did in Web2, by driving out a nascent but high-growth sector of its economy and the huge potential that will come with it.”

Diana Biggs

“These proposed regulations concern me not only because of the implications for EU businesses, but also because of their impact on the crypto industry and EU citizens. I started the initiative to send a letter, signed by a coalition of leading Web3 companies, whose operations in the EU would be hampered or jeopardized, because the EU must remain a competitive market for these innovative and pioneering companies. The outpouring of support in such a short time indicates the importance of revising these rules and including our suggestions.”

The document requested that decentralized finance projects be excluded from the requirements to register as legal entities and that decentralized stablecoins not be regulated by MiCA.

armed regulation

On this particular matter, yana afanassievafounder of competitive compliancepoints out that the “financial industry should not be armed or used for political activism. The financial industry should focus on moving funds, and there are already enough regulations and obligations around this. Adding yet another obligation to incorporate climate change factors in some way is not a reasonable expectation. I don’t think it will be enacted. ESMA already regulates securities and investor protection, so there is nothing new, and EBA regulates electronic money and payments. It doesn’t add anything to the MICA draft at all.

Biggs agrees, “regulation, if done right, will bring clarity and positively benefit the industry, but only if we get it right: balance freedoms with protections, follow the data, adapt to new technical realities, and enable the growth and innovation within effective frameworks. ”

Global regulation

Regulation is getting stricter all over the world.

The US Securities and Exchange Commission (SEC) The SEC published a new guideline suggesting that crypto exchanges list their clients’ digital assets as assets and liabilities. Additionally, companies offering crypto products and services in the UK are required to register with the Financial Conduct Authority (FCA), as mentioned earlier this month.

As international regulators seek to standardize the industry in the face of growing economic nationalism in the world’s industrialized countries and decentralization in banking, they are looking for where the energy and appetite for unity lies.

Related: FCA Warns Traders About Closing Crypto ATMs

There may be a growing demand for global standards for fintech in the future.