Tuesday, May 16, 2023
"I am very pleased that today we are delivering on our promise to start regulating the crypto-assets sector," Elisabeth Svantesson, minister of finance for Sweden, said in a statement. "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 the crypto industry for the purposes of money laundering."
Svantesson said a harmonized regulatory framework for the EU will work much better than individual national rules. Until now, each EU member state had its own set of tax rules for cryptocurrencies, for example; some regulate crypto exchanges while others do not.
MiCA is expected to protect investors by increasing transparency and creating a comprehensive framework for issuers and service providers, including compliance with anti-money laundering rules. The new rules cover issuers of utility tokens, asset referenced tokens and stablecoins, as well as service providers, like trading venues and crypto-wallets.
"This regulatory framework aims to protect investors, preserve financial stability, while allowing innovation and fostering the attractiveness of the crypto-asset sector," EU finance ministers explained in a statement announcing the rules.
MiCA is a continuation of an omnibus digital finance package of proposals first broached by European finance ministers in 2020. The intent has been to foster technological development and ensure financial stability, the EU explained in a statement.
In the United States, meanwhile, there has been a dearth of crypto legislation/regulation coming out of Washington, forcing some U.S.-based crypto firms to look elsewhere. Eric Brown, CEO at CryptoBucks, a unit of south-Florida-based Alliant Payments, said the company plans to test its POS crypto solution in emerging markets while the United States works out a regulatory framework.
New York state, however, is taking a stab at creating such a framework for crypto firms operating there. The state attorney general's office earlier this month revealed it had authored landmark legislation to tighten regulations around the crypto industry. The proposed regulations, said Attorney General Letitia James, aim to protect investors, consumers and the broader economy.
"Rampant fraud and dysfunction have become the hallmarks of cryptocurrency, and it is time to bring law and order to the multi-billion-dollar industry," said AG Letitia James. "All investments are regulated to account for every penny of investors' money – cryptocurrency should be no exception."
The proposed legislation—which elicited praise from New York lawmakers and regulators, alike—would require independent public audits of cryptocurrency exchanges and prevent individuals from owning the same companies, such as brokerages and token providers.
In addition, crypto platforms would have responsibilities to consumers similar to those banks have under the Electronic Funds Transfer Act, such as reimbursement requirements for customers who are victims of crypto-fraud. The bill also would strengthen the New York State Department of Financial Services' regulatory authority over digital assets.
Other ways the legislation aims to bolster investor protections include:
"These commonsense regulations will bring more transparency and oversight to the industry and strengthen our ability to crack down on those that don't pay respect to the law," James said.
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