Crypto loses EU cheerleader over Qatar scandal – POLITICO

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Expressed by artificial intelligence.

The crypto industry is scouring Brussels for a new political figurehead after losing a European Parliament chief cheerleader, Eva Kaili.

Belgian authorities on Friday arrested the top Greek socialist MP and five others as part of a police investigation into illegal lobbying on behalf of the Gulf state of Qatar, which denies any involvement.

Kaili and three others have since been charged with corruption after police raids seized phones and computers, along with 600,000 in cash, not cryptocurrencies.

Kaili on Tuesday dismissed the corruption allegations, saying she was innocent and had nothing to do with Qatar’s corruption, the lawyer representing her in Greece told local television.

The influence of Greek MEPs seems almost over now that Parliament President Roberta Metsola has suspended her from her role as vice-president. On Monday, Kaili was expelled from the Socialists & Democrats group.

The fall of 44-year-old Kailis created a crisis in parliament, where crypto brethren celebrated her as a defender of an industry that suffered a sharp market decline, scandals and backlash regulations.

Three political right-wing members of parliament have been named as possible heirs to the crypto crown in Brussels, which is debating future anti-money laundering and tax transparency rules for the industry. But none of them were as vocal on the Brussels stage as Kaili, who was among the few left-wing pro-crypto voices who were also respected in the European Commission and Council.

She was a cheerleader, but already rather isolated on the left side of the political spectrum, said Dutch socialist Paul Tang. The next cheerleader has to be squeaky clean if there’s any lesson to be learned from that.

Companies developing the technology behind digital collectibles, known as non-fungible tokens (NFTs), will take Kailis’ downfall particularly hard, as she was writing a parliament report on the nascent sector.

The defense of the Kailis industry attracted a lot of attention when lawmakers from the Greens and Socialist political groups tried to clamp down on crypto’s huge carbon footprint and lower the industry’s high privacy standards earlier this year.

Crypto lobbyists speaking to POLITICO on condition of anonymity praised the Greek MEP for her work on the files, while acknowledging that the scandal would be difficult to overcome. Industry associations Blockchain for Europe and European Crypto Initiative declined to comment.

The timing is unfortunate for the crypto industry, which lost a figurehead in Washington just over a month ago. Sam Bankman-Fried, the disgraced former chief executive of crypto exchange giant FTX, was an industry darling among US lawmakers in Washington until news outlets revealed he was using client money to finance risky bets. Bankman-Fried was arrested this week by Bahamian authorities.

FTX Founder Sam Bankman-Fried is led away in handcuffs by Royal Bahamas Police Force | Mario Duncanson/AFP via Getty Images

The scandals in Washington and Brussels are separate, but they leave crypto vulnerable to attack from lawmakers and regulators who are wary of the industry.

The heir to the throne

Crypto lobbyists have pointed to three possible centre-right heirs in the European Parliament to succeed the so-called crypto queen: Germans Stefan Berger, Czechs Ondej Kovak and Portuguese Ldia Pereira.

Berger and Renew Europes Kovak, a member of the European People’s Party (EPP), were part of the negotiating team that put together the European Union’s impending crypto rulebook. They were among lawmakers, including Kaili, who pushed back on efforts to phase out energy-intensive cryptocurrencies out of Europe. Berger is particularly ready to take up the fight for NFTs, which could be the subject of legislation within the next three years.

It is obvious that NFTs will play a gigantic role in the development of the digital environment, Berger said over the phone.

Pereira, who also hails from the EPP Group, was part of the Parliament team that developed measures to track and trace cryptocurrencies to prevent money launderers from abusing the market’s high privacy standards. . She has repeatedly warned against introducing rules that could end up smothering a growing industry with paperwork. Pereira declined to comment.

There are quite a few members who can and will be active in digital finance and crypto, Kovak said. This is not the end of good cooperation between Parliament and the crypto industry.

It wasn’t just crypto. Kaili also held other key technical positions for the socialist political group, leading negotiations on important cybersecurity bills like the NIS2 directive governing critical sectors, the cyber resilience bill for connected devices access to the Internet and a regulation on cybersecurity in the EU institutions.

As chair of the future scientific committee and member of the former committee on artificial intelligence, Kaili has also marked EU policy on AI, a theme on which she organized an event a year ago. barely two weeks and where she spoke alongside her sister Mantalena Kaili. of the non-profit association ELONtech.

The work of reassigning his responsibilities on legislative files, known as “shadow rapporteurs”, will be handled by Kaili’s former group, S&D.

Gian Volpicelli and Shannon Van Sant contributed reporting.

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