EU Races to Regulate Bitcoin and Cryptocurrencies as They Explode the Market -by Ecork

  • Late June could bring new crypto legislation in the EU
  • EU lawmakers seek global leadership in regulating digital assets
  • Bipartisan US efforts to regulate cryptocurrency were introduced in June

The three bodies involved in negotiating EU rules Bitcoin Other cryptocurrencies are hoping to finish markets legalizing crypto assets by the end of June as pressure increases to protect investors in a market that is collapsing.

The EU’s sterile legislative mechanism entails a “trilateral” between the European Commission, the European Parliament and the 27 member states. Negotiators met in mid-June and plan to meet again on June 30 to finalize the deal by the end of the six-month rotating presidency, according to a Bloomberg report.

Legislation for NFTs is in flux

Among other things, negotiators still need to work out whether to include non-fungible tokens (NFTs) in the legislation and whether crypto-asset service providers should be required to disclose power consumption, due to the massive computing power needed for mining and transactions.

The European Union began working on MiCA in 2020 in an effort to set common rules for the block cryptocurrency. As with privacy and high-tech issues, the European Union would like to take the lead globally in regulating digital assets.

The European Union seeks regulatory leadership

European Commissioner Myriad McGuinness called on all parties last Friday to find a compromise on the rules and end them. Stablecoin Terra Collapses in May, Withdrawals Stopped Before percentage gridShe said concerns about Russia’s use of crypto assets to evade sanctions made the rules even more pressing.

Celsius Network says the global sale of crypto assets is making it difficult to normalize its operations, warning that it will take some time. Babel Finance, a crypto lender in Hong Kong, has suspended withdrawals and refunds due to liquidity issues, and the Hong Kong crypto exchange Hoo has suspended transactions as withdrawals drained its funds.

Verena Ross, the head of the European Securities and Markets Authority, last month called for work on crypto rules to be completed, saying she was “impatiently” waiting for the parties to reach an agreement.

Crypto companies scramble to hire compliance officers

Cryptocurrency companies are scrambling to hire compliance officers as regulators prepare new rules or find ways to apply existing rules to digital assets. Companies are beginning to realize that rules are not only inevitable, but can also help keep the industry in a range of protective barriers.

in The usesThe The Securities and Exchange Commission dropped the ball on crypto regulation, according to Commissioner Hester Pierce, who says failure to adopt the rules keeps it up at night.

“We are not allowing innovation to evolve and experiment in a healthy way, and there are long-term consequences of this failure,” Pierce told CNBC at the Blockchain Summit at the end of May.

In early June, Senators Cynthia Loomis and Kirsten Gillibrand A bipartisan A bill to build a regulatory framework for crypto markets. The Responsible Financial Innovation Act grants regulatory authority over most spot digital asset markets for trading commodity futures commission.

Bitcoin, the leading speculative cryptocurrency, fell below $20,000 for the first time since November 2020, leaving investors vulnerable and regulators concerned not just about protecting them but maintaining financial stability and preventing financial crime.

Bitcoin daily price chart: June 22, 2022

Source: IG

Fabio Panetta, a member of the European Central Bank’s executive board, warned last month that the cryptocurrency market is now larger than the $1.3 trillion mortgage market when the 2008 financial crisis erupted.

Regulators are already starting to implement anti-money laundering restrictions. Cryptocurrency platform BitMex was fined $100 million last year by US regulators for failing to conduct anti-money laundering checks.

The UK’s Financial Conduct Authority, one of Europe’s most sophisticated regulators, is awaiting legislation that would expand its oversight of crypto firms beyond money laundering. So far, it has found only 33 companies willing to be licensed.

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