crypto against the world

Crypto scored a significant win in Europe on Monday. The European Parliament voted in favor advance a regulatory proposal without a controversial provision that would ban proof-of-work cryptocurrencies like bitcoin.

But the debate in Europe is far from over. And it highlights a major challenge for the industry: the battle over how crypto should be regulated is playing out in different ways across major geographies.

The EU’s approach to crypto regulation is slow but steady. The regulatory framework proposed in the Markets in Crypto Assets bill could set the stage for the digital asset industry internationally if adopted into law.

• First introduced in 2020, the Markets in Crypto Assets proposal went through a series of revisions and delays due to controversial language requiring environmental sustainability standards for proof-of-work cryptocurrencies like bitcoin and the early version of ether. While some EU leaders have asked for a test-of-work ban since November, the EU vote finally excluded the language.
• “Many countries around the world will now be watching MiCA closely,” said Stefan Berger, the member of the European Parliament spearheading the legislation. in a press release. He called it a “pioneer” in establishing “trusted oversight structures”, something crypto firms in the US have called for.
• While many in the cryptocurrency industry viewed Monday’s vote as a victory, the industry is set to see proposals for more legislation to combat the negative environmental impact of cryptocurrencies, in line with the goals of the European Green Deal.
• The European Commission will present a proposal to amend the draft MiCA law to include language for “the EU sustainable finance taxonomy [of] any crypto-asset mining activity that substantially contributes to climate change mitigation and adaptation” by January 2025.

Meanwhile, the UK is cracking down on cryptocurrencies, with an emphasis on stablecoins. The UK, which has forged a separate regulatory path since Brexit, is working to get the industry properly licensed and registered.

• The Financial Conduct Authority announced this month which had 50 live investigations into unauthorized crypto companies after opening more than 300 cases related to unregistered crypto companies.
• The Treasury has also revealed plans to specifically regulate stablecoinsas they were considered an immediate risk to traditional payment methods.
• But while it is forging its own path on the app, Britain is expected to be “largely consistent” with the EU’s approach to crypto regulation. said ComplyAdvantage, a London-based provider of financial compliance data and software.

Crypto is dealing with bigger regulatory issues in the US. The country’s fragmented financial regulatory scheme, which includes multiple agencies vying for a role in crypto and 50 states exercising some level of financial oversight, is a headache.

• Crypto is under fire on multiple fronts. The SEC argues that many cryptocurrencies are actually securities that should be subject to strict regulations. The Treasury Department is concerned with financial stability as well as money laundering and other crimes.
• The United States has “separate securities laws and separate derivatives or commodities laws” as well as “very broad concepts of what constitutes a security,” Michael Philipp, a partner at Morgan, Lewis & Bockius, told Protocol.
• That makes the US the “most complex” and “hardest place to do business” for crypto companies, he added. Philipp’s advice to crypto entrepreneurs: “Unless you can commit to the regulations [process]start somewhere abroad.”

“Sanity and logic” prevailed in Europe, Diogo Monica, President of Anchorage Digital said of the EU vote. But there are plenty of other fights ahead for cryptocurrencies on the battlefields over potentially much stricter rules. If you plan to operate globally, be prepared to rack up some miles. The only good news may be that Brussels Airlines is picking up his Dulles without stopping this month.

—Lindsey ChooE-mail | twitter) and Benjamin Pimentel (E-mail | twitter)

A version of this story first appeared on Protocol.com. read them here.

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