The European Union is preparing for the introduction of the MiCA regulation. These far-reaching regulations are issued primarily in the name of consumer protection, but appear to be aimed much more at preventing money laundering.
In September, the EU finalized its draft law regulating crypto (MiCA). As a result, officials in the European Parliament voted 28-1 in favor of the draft in October, which now has to go through a final vote.
The far-reaching MiCA regulation covers everything from stablecoins to crypto mining and NFTs to money laundering . Additionally, there are even clauses that could impact crypto influencers.
Patrick Hansen, Circle's EU Strategy and Policy Director, tweeted about one of these clauses on November 1st. According to the fine print, if crypto influencers post on social media about projects they benefit from but don't disclose , they could get in trouble . 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 regulations could even include memes, such as Elon Musk 's recent Doge tweet . Opinions on the new legislation are mixed: some wondered why the same rules didn't apply to other assets .
Proponents, on the other hand, said there should be more transparency from crypto influencers and people promoting coins.
Nor is it defined how these rules will be monitored and enforced . One thing is for sure though: the EU is about to make life significantly more difficult for the crypto industry and everyone connected to it.
Meanwhile, regulators are confident that the move will make the crypto industry significantly more attractive within the EU. On November 2, MiCAR reporter Stefan Berger claimed these regulations 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, the MiCAR also takes a hard stance on DeFi. Legislation could easily turn DeFi into Traditional Finance (TradiFi) . This allows all aspects of the sector to be centralized and controlled.
In addition, MiCAR also affects stablecoins and their issuance as well as crypto asset service providers (CASPs). This allows exchanges and brokers to be fully regulated to prevent any fraudulent activity.
The bill introduces three subcategories of crypto assets. These are defined by the question of whether the token is trying to stabilize its value in relation to other assets .
While the actual motivation behind MiCAR is to prevent money laundering through crypto, consumer protection is also advertised in this case . The regulations for crypto companies should therefore be given the same framework as banks. It is likely that MiCAR will not come into force before 2024.
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