- European legislators have given their final approval to the MiCA crypto regulatory framework
- MiCA is Europe’s largest effort to regulate the crypto market and make it more attractive to business
- Critics argue that the framework is already outdated
European legislators gave their final approval to regulations that will establish the first set of rules for the cryptocurrency sector within the European Union. The endorsement of the Markets in Cryptoassets (MiCA) regulation represents an initial attempt by governments to oversee the fledgling industry at such a broad level, months after the collapses of major crypto players such as Celsius and FTX. Having gained final approval yesterday, the MiCA legislation will be enforced in July after receiving formal ratification from the EU’s 27 member nations.
Regulations Have Been in the Works for Years
MiCA has been in the works for many years and has taken various guises since such a proposal was first mooted at the end of the 2010s. The version that was certified yesterday has been three years in the making, and European crypto insiders have greeted it as a preferable alternative to the U.S.’s method of regulating the industry through enforcement measures.
Nevertheless, some detractors have asserted that the law is already outdated even before it has been enacted, as it would have a limited effect in preventing many of the high-profile collapses that have recently plagued the cryptocurrency space. Appeals for revisions have already begun as a result.
“New Phase of Regulatory Oversight”
Ernest Urtasun, a member of parliament for the Greens and a shadow representative on MiCA, declared that the final approval “represents the beginning of a new phase of regulatory oversight for unregulated crypto markets, which have caused significant losses for many novice investors and provided refuge for fraudsters and criminal organizations for more than a decade.” However, he added that “important regulatory challenges remain unaddressed, and urgent new legislative measures are required to supplement MiCA with the missing components.”
MiCA requires any company offering crypto-related services in the EU to acquire registration in one of the bloc’s member states, which will allow them to operate across the entire EU. The European Banking Authority and the European Securities and Markets Authority will be in charge of ensuring that crypto platforms adhere to the regulations, including having sufficient risk management and governance processes to prevent another FTX-style collapse.
