Crypto Rules Get Final Approval to Make Europe a Global Regulatory Leader

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LONDON The European Union’s broad set of toughened cryptocurrency rules won final approval from member states on Tuesday, giving the 27-nation bloc a global lead in regulating the freewheeling sector.

The European Council adopted the package of rules known as Markets in Crypto Assets, or MiCA in the final stage of the bloc’s legislative process. Lawmakers in the European Parliament approved the rules in April, and they are expected to start coming into force in phases from July 2024.

The tougher European scrutiny comes on the heels of a string of high-profile crypto scandals, including the collapse of trading firm FTX and the implosion of stablecoin TerraUSD.

The rules aim to improve transparency and combat money laundering and will cover stablecoins which are usually pegged to hard currency or a commodity like gold, making them less volatile than cryptocurrencies. normal.

Other digital tokens as well as bitcoin-related services such as trading platforms and digital wallets are also subject to the rules, but not bitcoin itself.

“Recent events have confirmed the urgency of imposing rules that will better protect Europeans who have invested in these assets and prevent the misuse of the crypto industry for money laundering and terrorism,” said Swedish Finance Minister Elisabeth Svantesson, whose country holds the rotating presidency of the European Council.

Under MiCA, which has been in the works since 2020, crypto companies will need permission to operate in the EU and will be held liable if they lose investors’ assets. The authorities will establish a public list of non-compliant companies.

The rules, aimed at maintaining financial stability, include provisions aimed at combating market manipulation and insider trading. Companies issuing or trading crypto assets will have to disclose information about the risks, costs and fees that consumers face.

Major crypto companies will have to reveal how much energy they use. The huge amount of energy used in bitcoin mining to create new coins has raised concerns about the crypto’s carbon footprint.

The US has made little headway in strengthening oversight of cryptocurrencies and digital assets, while the UK is considering comments on proposed crypto regulations it outlined last year.

Some European countries, like Germany, already have basic crypto regulations.

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