Monday, July 22, 2024

EU Takes Major Step in Regulating Crypto with MiCA Law, Gains Support from Binance CEO

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Stanislav Shishkin
Stanislav Shishkinhttps://cryptoapa.com/
Stanislav is one of the lead copywriters on cryptoapa.com and discusses all recent events in the crypto market. This includes news updates, but also price analyzes and more. He developed his passion for cryptocurrency during the bull run in 2017. He has learned a lot since then. The combination of cryptocurrency and creative writing is perfect for Jeroen and an excellent way to share his knowledge with a wide audience. Stanislav at cryptoapa.com

The European Union (EU) has taken a significant step towards regulating the crypto industry with the introduction of the Markets in Crypto-assets Law, or MiCA. The law establishes a consistent set of rules and regulations for crypto-related activities across the EU, addressing concerns around money laundering, financing terrorism, transparency, disclosure, authorization, and supervision of transactions, and market manipulation. The law also requires crypto exchanges to be liable for losses incurred on their platforms, providing greater protection to investors.

The MiCA has received support from big-time industry player and CEO of Binance, Changpeng Zhao, who believes the tailored regulations create a pragmatic solution to the challenges the industry collectively faces. In response to the new law, Zhao expressed his willingness to make several changes to the Binance exchange’s operational framework to comply fully with the regulations.

The EU’s move to provide clarity and stability to the digital asset economy is a significant milestone in cryptocurrency, paving the way for wider adoption and integration into the mainstream financial system. By contrast, the United States has so far provided little clarity on crypto regulation, with several centralized entities like Gemini, Binance, and Coinbase coming under the crosshairs of federal authorities. The lack of clarity is driving more businesses abroad, highlighting the EU’s open-handed approach to the industry.

The MiCA law is a welcome development for the crypto industry, and its implications for crypto demonstrate the EU’s commitment to protecting consumers and investors, while also addressing environmental concerns. With the passage of this law, the EU has raced ahead of the US in providing clarity and stability in the crypto space.

What are the key provisions of the MiCA law?

The key provisions of the MiCA law are:

  1. Consistent set of rules and regulations: The MiCA law establishes a consistent set of rules and regulations for crypto-related activities across the European Union.
  2. Liability for losses: Crypto exchanges are made liable for losses accrued on their platforms, providing greater protection to investors.
  3. Anti-money laundering measures: The law includes measures to combat money laundering and financing terrorism using cryptocurrencies.
  4. Transparency and disclosure: The law requires transparency and disclosure of risks, costs, charges, and implications to consumers and investors.
  5. Market manipulation: The law includes stringent measures against manipulating the markets.
  6. Environmental concerns: The MiCA also addresses the environmental implications of cryptocurrencies, imploring service providers to disclose their energy consumption and explore alternative energy sources to reduce their carbon footprint.
  7. Traceability of crypto transactions: The MiCA aims to protect cryptocurrency transactions and transfers above €1000 from self-hosted wallets, which can be traced and even blocked on suspicion.

It should be noted that the law does not cover decentralized finance (DeFi) or non-fungible tokens (NFTs).

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