Forex in this article
• The EU agrees on a uniform legal framework for crypto-assets
• The EU Parliament and the EU countries compromise with NFTs
• The European Commission’s adviser believes that few assets benefit from NFT exemption
Korea Blockchain Week 2022, a crypto and blockchain event in Seoul, hosted by FactBlock and Hashed from August 7 to 14, brought together crypto enthusiasts and the brightest minds in the industry for keynotes, panel discussions, pitch competitions and investor meetings to network and discuss the future of blockchain, cryptocurrencies, DeFi, NFT, Metaverse, Web3 and more.
News on the subject of NFTs also surfaced: Peter Kerstens, advisor to the European Commission, explained to attendees how CoinDesk reports that for non-fungible tokens (NFTs) that are part of a collection, the EU’s new crypto rules would must be used.
The EU Parliament and member states agree on crypto directive
On June 30, representatives of the European Parliament and EU member states agreed on an EU directive for cryptocurrencies called “Markets in Crypto Assets”, or MiCA for short. The new set of rules is scheduled to enter into force in the EU by the end of 2023 and create a uniform legal framework for the trading of crypto assets in the EU. The focus of regulation should be on protecting investors.
In the future, licenses will be required for companies that want to issue and sell cryptocurrencies such as Bitcoin and Co. in the EU. In addition, the EU wants to be able to track crypto transfers, which is why crypto platforms – regardless of the amount transferred – must determine information about the sender and receiver and, if necessary, forward them to the responsible authorities. Direct transfers between owners of platform-independent crypto-wallets should be omitted here – if crypto-platforms handle such transactions, however, there should be an information obligation from 1,000 euros. The new regulation also aims to give stablecoin holders the right to claim their money back for free. Providers must in future be able to demonstrate a minimum level of liquidity. They must also be supervised by the European Banking Authority (EBA). Furthermore, crypto companies must also disclose data on energy consumption and environmental impact after the law comes into force.
Compromise with NFTs
However, the representatives of the EU Parliament and the EU countries did not agree on one topic for a long time: NFTs. While EU parliamentarians wanted NFTs to be included in the regulation, EU countries opposed it. In the end, both parties reached a compromise: supervisors of NFTs should be able to demand compliance with crypto regulations only under certain conditions. If NFTs behaved like traditional securities, the EU’s MiFID financial market rules could apply. Within a year and a half, the EU Commission intends to examine whether there is a need for separate rules for NFTs.
Only a few assets should benefit from the exemption for NFTs
However, as CoinDesk reports, comments from the European Commission’s Peter Kerstens at Korea Blockchain Week 2022 indicated that this exemption is unlikely to provide much relief for NFTs. EU lawmakers “understand an NFT very narrowly,” according to Kerstens, suggesting that few assets are likely to benefit from this exemption. “If a token is issued as a collection or as a series – even though the issuer may refer to it as an NFT, and even though each individual token in that series may be unique – it is not considered an NFT, so the requirements apply,” it reads . CoinDesk Kerstens, who points out that in the future, publishers of NFT collections would have to publish a “white paper” for each NFT, comparable to a securities prospectus for stocks – which, in his opinion, would be “stupid”. According to Kerstens, publishers should also not tempt people to buy, for example with absurd promises about the future value of NFTs.
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