New EU rules on crypto assets don’t go far enough – ECB’s McCaul

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FRANKFURT, April 5 (Reuters) – The European Union’s proposed regulation for crypto assets does not go far enough and safeguards need to be strengthened to adequately capture risk, supervisory board member Elizabeth McCaul said on Wednesday. of the European Central Bank.

The European Parliament is set to vote on the Crypto-Asset Markets Bill (MiCA) later this month, taking a big step forward in scrutinizing the crypto world after a series of scandals and meltdowns .

“While the new Basel standard and the MiCA are important milestones, I fear they are not enough on their own,” McCaul said in a blog post.

“In line with the principle of proportionality, major crypto-asset service providers should be subject to both stricter requirements and enhanced oversight: neither is covered by the MiCA,” she said. explain.

Another issue is how the size of crypto-asset service providers is measured, as the now-collapsed crypto exchange FTX would not have been considered significant given the way the business was organized. .

“In fact, Binance, which is the biggest crypto player, would have between 28 and 29 million active users globally, but would probably not even meet the threshold to be classified as important in the EU”, McCaul said.

The crypto world has been rocked by high-profile failures, bankruptcies and fraud over the past year, but the value of many assets has risen further over the past month as concerns over the health of the banking sector that prompted some to move away from bank deposits. .

McCaul argued that new quantitative metrics are needed that could take into account business type, such as volume for trading platforms or assets in custody for custodial businesses.

She said the thresholds should be measured at the group level rather than at the level of each entity, given the complexity of the operations. The same goes for conflicts of interest, which must be identified across the group and in affiliated entities, McCaul said.

Reporting by Balazs Koranyi; Editing by Bernadette Baum

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