The EU Council’s Presidency and the European Parliament have achieved a preliminary agreement on a proposed regulation for crypto assets: MiCA. The proposed MiCA (Market in Crypto Assets) guideline aims to regulate cryptocurrency marketplaces.
This agreement applies to crypto-assets, crypto-asset issuers, and crypto-asset service providers. Before proceeding with the official adoption procedure, this interim agreement must be approved by the Council and the European Parliament.
Consumers now have few rights to protection or remedy, mainly when transactions take place outside of the European Union. The new laws compel crypto-asset service providers to satisfy stringent standards to secure customer wallets.
Recent developments on this quickly evolving sector have confirmed the urgent need for an EU-wide regulation. MiCA will better protect Europeans who have invested in these assets, and prevent the misuse of crypto-assets, while being innovation-friendly to maintain the EU’s attractiveness. This landmark regulation will put an end to the crypto wild west and confirms the EU’s role as a standard-setter for digital topics, says, Bruno Le Maire, French Minister for the Economy, Finance and Industrial and Digital Sovereignty, in an EU-Council’s earlier press release.
They also define these crypto-asset service providers’ obligation if they lose investors’ crypto-assets. The proposed MiCA directive seeks to encompass any market abuse associated with any transaction or service, including market manipulation and insider trading when transactions occur outside the European Union.
The proposed MiCA Directive is part of the digital finance package, which intends to unlock and expand the potential of digital finance in terms of innovation and competition while mitigating risks.
While several EU Member States have national legislation regarding crypto-assets, there has been no particular regulatory framework at the European Union level until recently. As a result, this might be viewed as the first step toward establishing a regulatory framework at the EU level.