European Union crypto-asset holders and service providers will not be protected under the EU’s Markets in Crypto Assets (MiCA) regulation, which will not enter into effect until December 2024, the European Securities and Markets Authority (ESMA) said in a statement today (17 Oct).
The rules, which took partial effect in June of this year, were the world’s first comprehensive set of regulations for the crypto market.
“Even with the implementation of MiCA, retail investors must be aware that there will be no such thing as a ‘safe’ crypto-asset,” the regulator warned in a statement.
ESMA Chair, Verena Ross, called for member states to consider limiting the optional 18-month transitional period offered for implementing MiCA rules which could see some states deferring protections until 2026.
“While the MiCA Regulation is a welcome step forward, it will not provide the same level of investor protection as exists for traditional financial investment products, nor will it enable mitigation of all the significant risks linked to crypto-assets,” Ross said in a letter.
Regulating crypto has become a priority for global economies following the collapse of US crypto trading platform FTX.
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By GlobalData
FTX, formerly the second-largest crypto exchange in the world, filed for bankruptcy in November 2022 – with ripple effects throughout the rest of the industry and a decline in investor and consumer confidence in the sector.
FTX founder, Sam Bankman-Fried, faces criminal charges for allegedly stealing billions of dollars of customers’ assets.
