The European Union is preparing the introduction of the MiCA regulation. These far-reaching rules are issued primarily in the name of consumer protection, but appear to be aimed far more at preventing money laundering.
In September, the EU finalized its draft law on the regulation of crypto (MiCA). As a result, officials in the European Parliament voted 28-1 in favor of the draft in October, which will now go through a final vote.
The far-reaching MiCA regulation covers everything from stablecoins to cryptomining and NFTs to money laundering. Additionally, there are even clauses that can affect crypto influencers.
Patrick Hansen, Circle’s EU strategy and policy director, tweeted about one of these clauses on November 1. According to the fine print, crypto influencers can get into trouble if they comment on projects on social media, which they benefit from but do not disclose this. With the entry into force of MiCAR, such action will be considered market manipulation in the EU.
MiCA regulation brings more transparency to crypto
Thanks to the vague terminology, the rules could even spawn memes like latest Doge tweet by Elon Musk. Opinions on the new legislation are mixed: Some wondered why the same rules did not apply to other assets.
Supporters, on the other hand, said there should be more transparency from crypto influencers and people who promoted coins.
Nor is it defined how these rules will be monitored and enforced. One thing is certain, however: the EU is making life significantly more difficult for the crypto industry and everyone associated with it.
Meanwhile, regulators are confident that the move will make the crypto industry significantly more attractive in the EU. On November 2, MiCAR reporter Stefan Berger argued that these rules are necessary if Europe is to secure an influential position in the cryptosphere.
MiCA regulation put to the test
In the name of consumer protection, MiCAR is also taking a tough stance on DeFi. Legislation could easily turn DeFi into Traditional Finance (TradiFi).. This makes it possible to centralize and control all aspects of the sector.
In addition, MiCAR also affects stablecoins and their issuance, as well as crypto asset providers (CASPs). This allows exchanges and brokers to be fully regulated to prevent any fraudulent activity.
The bill introduces three subcategories of cryptoassets. These are defined by the question of whether the token is trying to stabilize its value relative to other assets.
While the real motivation behind MiCAR is to prevent money laundering through crypto, consumer protection is also advertised in this case. The rules for crypto companies should therefore have the same framework as banks. It is likely that MiCAR will not enter into force until 2024.
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