The anonymity deemed essential in the crypto universe will “no longer be possible” following the adoption of EU legislation on May 16, according to EU sources.
New rules designed to protect consumers will require service providers such as Coinbase to register with European authorities like other financial institutions. They will become liable if they lose investors’ money.
“The idea isn’t to hinder, as this is an emerging market, but we want [companies] to start paying attention and protecting consumers,” says an EU source. “Being traceable, having an address, people being able to contact you, basic transparency—existing as a company.”
The package of rules— known as Markets in Crypto Assets, or MiCA —means the EU will be “a global lead in regulating the freewheeling sector,” according to the Associated Press.
“Recent events have confirmed the urgent need for imposing rules which will better protect Europeans who have invested in these assets, and prevent the misuse of crypto industry for the purposes of money laundering and financing of terrorism,” said Elisabeth Svantesson, Sweden’s finance minister.
The reaction from some crypto services, such as Coinbase, appears to have been positive, with Coinbsase Tweeting that MiCA is “a pivotal moment for crypto regulation” and that “this comprehensive framework will give crypto organisations the confidence to invest and grow in the region.”
The @Europarl_EN‘s adoption of #MiCA is a pivotal moment for crypto regulation. ??
This comprehensive framework will give crypto organizations the confidence to invest and grow in the region. https://t.co/tYhJW8fBpX
— Coinbase ?️ (@coinbase) April 20, 2023
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The EU source also noted that MiCA is a reaction to the way crypto transfers have been used to circumnavigate sanctions imposed on Russia, and to commit tax fraud.
“The new rules require that all crypto assets and service providers based in the EU report on transactions made by residents in the European Union,” says Astrid Van Mierlo, deputy head of the EU’s unit for direct tax policy and cooperation. “Member States will have access to the information they need to make sure that taxes are paid.”
The @Europarl_EN‘s adoption of #MiCA is a pivotal moment for crypto regulation. ??
This comprehensive framework will give crypto organizations the confidence to invest and grow in the region. https://t.co/tYhJW8fBpX
— Coinbase ?️ (@coinbase) April 20, 2023
The new rules are due to come into effect by December 2024 in order to give Member States time to “transpose” them into national law, the source says.
