EU agrees rules to tame ‘Wild West’ crypto market

Globally, crypto assets are largely unregulated, with national operators in the EU only required to demonstrate controls to combat money laundering.

Representatives of the European Parliament and EU countries discussed a deal on the Crypto Asset Markets Act (MiCA), which is expected to come into force around the end of 2023.

“Today, we are bringing order to the wild west of crypto assets and setting clear rules for a consistent market,” said Stefan Berger, a centre-right MP who negotiated on behalf of parliament.

“The recent drop in the value of digital currencies shows us how risky and speculative they are, and how important it is to act,” Berger said.

MiCA will be the first comprehensive regime for cryptoassets in the world and will contain strict measures to protect against abuse and market manipulation, added Ernest Urtasun, MP for the Green Party in Parliament.

The new law gives crypto asset issuers and related service providers a “passport” to serve customers across the EU from a single base while respecting capital and consumer protection rules.

The United States and the United Kingdom, two major crypto centers, have not yet approved similar rules.

Cryptocurrency assets have come under pressure following the collapse of TerraUSD and Luna tokens last month, with major U.S. cryptocurrency lending company Celsius Network freezing withdrawals and transfers this month.

Bitcoin has crashed this month to around $17,600 and traded around $18,900 on Thursday, well below its late-March level of $48,200 as investors take losses.

Thursday’s talks focused on issues such as oversight and energy consumption of cryptoassets.

“We agreed that providers of crypto assets should disclose information about energy consumption and the environmental impact of assets in the future,” Berger said.

According to MP Urtasun, the EU states will be the main regulators for crypto companies, although the securities watchdog ESMA will have the power to intervene if investor protection or financial stability is threatened.

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