The
European Securities and Markets Authority (ESMA ) is curious what the
cryptocurrency industry thinks about the recently introduced Markets in
Crypto-Assets Regulation (MiCA). Accordingly, it has published its inaugural
consultation package and plans to publish two more in the future. Stakeholders
are invited to submit their comments by the end of September 2023.
This
consultation package, the first of three, seeks input on proposed rules for
crypto-asset service providers (CASPs), specifically concerning their
authorization, conflicts of interest identification and management as well as handling complaints.
ESMA also
intends to gather more insights on stakeholders’ current and future activities
as part of a fact-finding exercise to better understand the EU’s crypto-asset
markets and their evolution. This initiative includes gaining information about
stakeholders’ expected turnover, planned white paper publications, and
preferences for on-chain versus off-chain trading.
Verena
Ross, the Chairwoman of ESMA, considers this first consultation package a
significant step towards implementing the MiCA framework.
“We are
determined to ensure entities involved in crypto-asset related activities
understand that the EU is not a place for forum-shopping. We also want to
remind consumers that, even with the implementation of MiCA, there will be no
such thing as a safe crypto-asset,” Ross commented.
Responses
to these consultations will remain confidential and assist ESMA in fine-tuning
proposals for the second and third consultation packages. Alongside this
consultation, ESMA will continue working on its remaining mandates with a view
to publishing a second consultation package in October 2023.
ESMA
expects to publish a final report and submit the draft of technical standards to
the European Commission for endorsement no later than 30 June 2024. The
regulation was first presented in September 2020, So its implementation could
take four years. Of course, if there are no delays along the way.
MiCA to Change the
European Crypto Landscape
The
European Union’s council gave a thumbs up to MiCA, which the European Parliament
first approved in late April. This is the first time the local regulators made
a Europe-wide law specifically for cryptocurrencies like Bitcoin.
This MiCA
law is the first of its kind in the world. It is designed to keep people in
Europe safe when they are dealing with cryptos. It also wants to make sure that
digital assets are not harming the environment or being used for illegal
activities like money laundering.
To do this, companies that run digital money
exchanges and digital wallets must have a license to do business in any
European country. In addition, companies that issue stablecoins, a certain type
of cryptocurrency, must have enough backup funds.
Meanwhile,
the UK, which is no longer part of the EU because of Brexit, can make its own cryptocurrency
rules. Recent events show that they are headed in this direction. Just last
week, the UK passed a law called the Financial Services and Markets Bill. This
law now recognizes cryptocurrencies and stablecoins as financial activities
that must be regulated. Consequently, these digital
currencies are now legally treated like other financial instruments.
Europe Regulates, While
the US Fights Crypto
While
European regulators try to adopt safe crypto rules, their United States peers have started an open war against popular crypto exchanges. According to the US SEC,
platforms like Coinbase and Binance offer services illegally without proper
authorization.
The SEC’s
actions have led to a lawsuit against Binance and Coinbase, thus bringing havoc to
the cryptocurrency industry. The Commission filed a total of 13 charges
against Binance, its two affiliates, and the CEO, Changping Zhao, which include
operating illegal trading platforms, offering unregistered crypto asset
securities, and mixing customers’ funds.
In the
meantime, Coinbase was charged with operating an illegal trading platform that
offered unregistered crypto asset securities. Additionally, the securities
watchdog accused the platform of running a digital asset staking-as-a-service program
without authorization.
The
European Securities and Markets Authority (ESMA ) is curious what the
cryptocurrency industry thinks about the recently introduced Markets in
Crypto-Assets Regulation (MiCA). Accordingly, it has published its inaugural
consultation package and plans to publish two more in the future. Stakeholders
are invited to submit their comments by the end of September 2023.
This
consultation package, the first of three, seeks input on proposed rules for
crypto-asset service providers (CASPs), specifically concerning their
authorization, conflicts of interest identification and management as well as handling complaints.
ESMA also
intends to gather more insights on stakeholders’ current and future activities
as part of a fact-finding exercise to better understand the EU’s crypto-asset
markets and their evolution. This initiative includes gaining information about
stakeholders’ expected turnover, planned white paper publications, and
preferences for on-chain versus off-chain trading.
Verena
Ross, the Chairwoman of ESMA, considers this first consultation package a
significant step towards implementing the MiCA framework.
“We are
determined to ensure entities involved in crypto-asset related activities
understand that the EU is not a place for forum-shopping. We also want to
remind consumers that, even with the implementation of MiCA, there will be no
such thing as a safe crypto-asset,” Ross commented.
Responses
to these consultations will remain confidential and assist ESMA in fine-tuning
proposals for the second and third consultation packages. Alongside this
consultation, ESMA will continue working on its remaining mandates with a view
to publishing a second consultation package in October 2023.
ESMA
expects to publish a final report and submit the draft of technical standards to
the European Commission for endorsement no later than 30 June 2024. The
regulation was first presented in September 2020, So its implementation could
take four years. Of course, if there are no delays along the way.
MiCA to Change the
European Crypto Landscape
The
European Union’s council gave a thumbs up to MiCA, which the European Parliament
first approved in late April. This is the first time the local regulators made
a Europe-wide law specifically for cryptocurrencies like Bitcoin.
This MiCA
law is the first of its kind in the world. It is designed to keep people in
Europe safe when they are dealing with cryptos. It also wants to make sure that
digital assets are not harming the environment or being used for illegal
activities like money laundering.
To do this, companies that run digital money
exchanges and digital wallets must have a license to do business in any
European country. In addition, companies that issue stablecoins, a certain type
of cryptocurrency, must have enough backup funds.
Meanwhile,
the UK, which is no longer part of the EU because of Brexit, can make its own cryptocurrency
rules. Recent events show that they are headed in this direction. Just last
week, the UK passed a law called the Financial Services and Markets Bill. This
law now recognizes cryptocurrencies and stablecoins as financial activities
that must be regulated. Consequently, these digital
currencies are now legally treated like other financial instruments.
Europe Regulates, While
the US Fights Crypto
While
European regulators try to adopt safe crypto rules, their United States peers have started an open war against popular crypto exchanges. According to the US SEC,
platforms like Coinbase and Binance offer services illegally without proper
authorization.
The SEC’s
actions have led to a lawsuit against Binance and Coinbase, thus bringing havoc to
the cryptocurrency industry. The Commission filed a total of 13 charges
against Binance, its two affiliates, and the CEO, Changping Zhao, which include
operating illegal trading platforms, offering unregistered crypto asset
securities, and mixing customers’ funds.
In the
meantime, Coinbase was charged with operating an illegal trading platform that
offered unregistered crypto asset securities. Additionally, the securities
watchdog accused the platform of running a digital asset staking-as-a-service program
without authorization.
