EU member states and parliament have agreed on details for broader cryptocurrency regulation, which will put more responsibility on crypto companies to protect investors.
The European Union (EU) has reached a consensus on the New regulations to be applied to regulate the cryptocurrency sector. In it, regulators cover all aspects of the sector from investor protection, environmental considerations and stable currencies, among other aspects.
The frame is titled Markets in Cryptoassets Regulation (MiCA) and its development was accelerated by the recent collapse of the cryptocurrency market, the failure of protocols, like Terra's, or the liquidation of large companies such as Three Arrows Capital, which have severely affected investors.
The new regulations will put the focus on crypto companies
The new regulation requires companies to be more responsible for the losses suffered by investors. Cryptocurrency companies will be required to comply higher standards of investor protection and may be held responsible in the event of losses of their investors' funds.
In this sense, the new regulations also contemplate any type of market abuse related to any transaction or service, in particular market manipulation and insider trading.
The new MiCA regulations also require stablecoin issuers to have a presence in the European Union and that they have sufficient liquid reserves at all times to back up their stablecoins.
On the other hand, the sector will have to disclose information about the environmental impact that their actions are producingThe European Central Bank (ECB) has been particularly focused on the energy impact of the cryptocurrency market.
The European Securities and Markets Authority (ESMA) will be responsible for preparing draft regulatory technical standards on the content, methodology and presentation of information on the main negative consequences in environmental and climate matters.
On the other hand, the MiCA regulations have focused on not to duplicate provisions relating to the fight against money laundering, although it will require that a public register be maintained for non-compliant crypto-asset service providers.
Finally, it is noteworthy that NFTs have been excluded from the new MiCA regulations, although they are included if they fall into any of the existing categories of cryptoassets.
Will this new regulation be definitive?
These provisions are not final and the content of the new regulations will likely change as MiCA is reviewed over the next 18 months.
In this regard, the provisional agreement has yet to be subject to approval by the Council and the European Parliament before the formal adoption procedure takes place.
[hubspot type=cta portal=20298209 id=38fb28e1-1dc1-40e3-9098-5704ca7fcb07]
