Treat Crypto Like Securities By Default, European Parliament Study Finds As EU Prepares For MiCA

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Crypto assets should be treated as securities by default, and autonomous organizations that govern decentralized finance (DeFi) should be granted legal status, according to a study commissioned by European Parliament lawmakers and published on Tuesday.

The report comes as the European Union finalizes its regulations on Crypto Asset Markets (MiCAs) and considers whether a sequel will be needed to cover additional areas such as DeFi, staking and non-fungible tokens (NFTs).

All crypto assets should be considered a transferable security, which implies that they would be subject to the strict EU governance and authorization rules that apply to traditional stocks and bonds, unless and until what a national regulator decides otherwise, the report says.

This default rule transfers the burden of gathering technical facts and discussing the scope of regulation from regulators to industry, said the report, written by a panel of academics from the universities of Luxembourg, Sydney and Hong Kong. Kong, at the request of the European Parliament. Monetary Affairs Committee.

Without changes, we are skeptical of the positive effects of MiCA in the short term given the difficulties of enforcing its rules in an opaque cross-border context, in which 10,000 crypto protocols are vying for the lightest possible regulation, the document adds, although that its conclusions are not a formal position of the European Parliament.

The crypto industry has been plagued by a lack of clarity about whether rules designed for traditional financial securities apply to digital assets. In the United States, the head of the Securities and Exchange Commission, Gary Gensler, declined to say whether major cryptocurrencies such as ether (ETH) are securities within his jurisdiction, but a series of actions in lawsuits against companies such as Ripple have led to charges of regulation by enforcement. .

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