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The Markets in Crypto Assets (MiCA) is being hailed as the world’s first comprehensive regulation aimed at bringing the largely unregulated cryptocurrency markets under government regulation.
It is part of a comprehensive digital finance package, aka the ‘Digital Operational Resilience Act (DORA)’, which aims to protect the financial services sector from fraudulent activities and is likely to become law in July 2023, setting in motion rules for Installation of wheels to be effective by January 2025 in phases.
While the United States is embroiled in a struggle to clarify what digital assets are, the EU, with MiCA in the picture, has doubled down on how to regulate, rather than who, is going to regulate the space. is – an approach that could prove to be a game changer.
But the big question is how MICA will affect the European crypto market.
Dismissing exit concerns from Europe
The European Union Council – representing 27 member states, unanimously approved MICA, becoming the first major jurisdiction in the world with a crypto licensing regime.
The positive reception received by the EU’s strong regulatory framework can be attributed to the fact that lawmakers have mostly refrained from adopting a “regulation-by-enforcement” approach. Therefore, many other markets and jurisdictions have started looking to MICA as an example to follow in order to remain competitive in the global market. Countries like Britain, Australia and Hong Kong are following in its footsteps.
Several experts have reflected on how MiCA could shape the regulatory landscape in the wider crypto industry.
Brinda Paul, Director of Compliance at Banxa, believes that MICA sets a higher standard for consumer protection, which will make customers immensely benefit from a more reliable and trustworthy crypto market. in conversation with crypto potatoThe executive further added that “increased customer trust has the potential to increase participation in the crypto economy.”
Its launch is expected to act as a catalyst by attracting both startups and major businesses, setting the stage for more healthy competition.
For end-users, Laura Chaput, head of regulatory compliance at Brussels-based market-maker Keyrock, said that while governance rules would increase transparency, rules on stablecoin issuers would provide more “confidence that their tokens are properly reserved and redeemable, and Safeguards against market manipulation will enhance the integrity of the market.”
But the changes will not be very significant or noticeable for regulated entities that have already implemented strict KYC and AML procedures. But users of unregulated or non-compliant exchanges could face withdrawal issues and would be asked to provide additional information about their identity and source of funds, according to Zonda’s Przemyslaw Kral.
Addressing market manipulation and abuse
There is legitimate speculation about how the alleged malpractices at FTX could have been prevented if MICA had been invoked earlier. In fact, Stefan Berger, a member of the European Parliament’s economics committee, previously said that adopting MiCA as a global set of regulatory standards would prevent such a disaster from happening.
On the aspect, Banksa’s Paul said that MiCA initiates stringent measures to promote a safe, transparent and fair crypto market, including disclosure of insider information, stricter restrictions on insider trading, unlawful disclosure of insider information And market manipulation is involved.
Therefore, it is safe to say that obtaining authorization under the regulatory regime will not be an easy task, and the controls exercised by the competent authorities will generate substantial and recurring compliance activity by crypto service providers.
Tiana Whitehouse, Chief Compliance Officer at CLC & Partners, added,
“MICA is broadly aligned with the EU’s existing Market Abuse Regulation (MAR), which applies to securities and derivatives. Under the new law, CASPs and other participants facilitating trading in crypto-assets in the EU will should have adequate controls in place to prevent and detect market abuse and manipulation.
bone of contention
MiCA is set to be implemented in two phases. The first 12-month phase-out period pertains to stablecoins and the next 18-month period pertains to the rest of the industry. For now, the focus will be on its implementation, which includes offering comprehensive regulations for the crypto market.
Overall, the regulation seeks to control the issuance and provision of services related to crypto-assets and stable coins. But it has left many components of the digital asset industry out of its purview. One such non-fungible token is .
Despite being excluded from MiCA’s clear white paper requirements, the NFT sector will still feel the impact of regulation, according to Yuri Bryusov, co-founder and chief legal officer of IOGINALITY NFT Marketplace. he adds,
“Indirectly affecting the NFT marketplace by enforcing AML/CTF regulations, MICA can contribute to increasing transparency and trust in the rapidly expanding world of digital art, collectibles, and more, ultimately uplifting the NFT space.” “
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The Markets in Crypto Assets (MiCA) is being hailed as the world’s first comprehensive regulation aimed at bringing the largely unregulated cryptocurrency markets under government regulation.
It is part of a comprehensive digital finance package, aka the ‘Digital Operational Resilience Act (DORA)’, which aims to protect the financial services sector from fraudulent activities and is likely to become law in July 2023, setting in motion rules for Installation of wheels to be effective by January 2025 in phases.
While the United States is embroiled in a struggle to clarify what digital assets are, the EU, with MiCA in the picture, has doubled down on how to regulate, rather than who, is going to regulate the space. is – an approach that could prove to be a game changer.
But the big question is how MICA will affect the European crypto market.
Dismissing exit concerns from Europe
The European Union Council – representing 27 member states, unanimously approved MICA, becoming the first major jurisdiction in the world with a crypto licensing regime.
The positive reception received by the EU’s strong regulatory framework can be attributed to the fact that lawmakers have mostly refrained from adopting a “regulation-by-enforcement” approach. Therefore, many other markets and jurisdictions have started looking to MICA as an example to follow in order to remain competitive in the global market. Countries like Britain, Australia and Hong Kong are following in its footsteps.
Several experts have reflected on how MiCA could shape the regulatory landscape in the wider crypto industry.
Brinda Paul, Director of Compliance at Banxa, believes that MICA sets a higher standard for consumer protection, which will make customers immensely benefit from a more reliable and trustworthy crypto market. in conversation with crypto potatoThe executive further added that “increased customer trust has the potential to increase participation in the crypto economy.”
Its launch is expected to act as a catalyst by attracting both startups and major businesses, setting the stage for more healthy competition.
For end-users, Laura Chaput, head of regulatory compliance at Brussels-based market-maker Keyrock, said that while governance rules would increase transparency, rules on stablecoin issuers would provide more “confidence that their tokens are properly reserved and redeemable, and Safeguards against market manipulation will enhance the integrity of the market.”
But the changes will not be very significant or noticeable for regulated entities that have already implemented strict KYC and AML procedures. But users of unregulated or non-compliant exchanges could face withdrawal issues and would be asked to provide additional information about their identity and source of funds, according to Zonda’s Przemyslaw Kral.
Addressing market manipulation and abuse
There is legitimate speculation about how the alleged malpractices at FTX could have been prevented if MICA had been invoked earlier. In fact, Stefan Berger, a member of the European Parliament’s economics committee, previously said that adopting MiCA as a global set of regulatory standards would prevent such a disaster from happening.
On the aspect, Banksa’s Paul said that MiCA initiates stringent measures to promote a safe, transparent and fair crypto market, including disclosure of insider information, stricter restrictions on insider trading, unlawful disclosure of insider information And market manipulation is involved.
Therefore, it is safe to say that obtaining authorization under the regulatory regime will not be an easy task, and the controls exercised by the competent authorities will generate substantial and recurring compliance activity by crypto service providers.
Tiana Whitehouse, Chief Compliance Officer at CLC & Partners, added,
“MICA is broadly aligned with the EU’s existing Market Abuse Regulation (MAR), which applies to securities and derivatives. Under the new law, CASPs and other participants facilitating trading in crypto-assets in the EU will should have adequate controls in place to prevent and detect market abuse and manipulation.
bone of contention
MiCA is set to be implemented in two phases. The first 12-month phase-out period pertains to stablecoins and the next 18-month period pertains to the rest of the industry. For now, the focus will be on its implementation, which includes offering comprehensive regulations for the crypto market.
Overall, the regulation seeks to control the issuance and provision of services related to crypto-assets and stable coins. But it has left many components of the digital asset industry out of its purview. One such non-fungible token is .
Despite being excluded from MiCA’s clear white paper requirements, the NFT sector will still feel the impact of regulation, according to Yuri Bryusov, co-founder and chief legal officer of IOGINALITY NFT Marketplace. he adds,
“Indirectly affecting the NFT marketplace by enforcing AML/CTF regulations, MICA can contribute to increasing transparency and trust in the rapidly expanding world of digital art, collectibles, and more, ultimately uplifting the NFT space.” “
Binance Free $100 (Exclusive): Use this link to register and get $100 free and 10% off on Binance Futures for the first month. (terms).
PrimeXBT SPECIAL OFFER: Use this link to register and enter the code CRYPTOPOTATO50 to receive up to $7,000 on your deposit.
