The European Parliament voted in favor of adopting the Markets in Crypto-Assets (MiCA) regulation and rules around crypto transfers on April 20 with overwhelming support.
The new regulatory regime will start to come into force in 2024 and is expected to be fully implemented within the next two years. The texts are now only pending final endorsement by the European Council before they are published in the Official Journal.
Parliamentarian and rapporteur Stefan Berger said:
“This puts the EU at the forefront of the token economy with 10 000 different crypto assets. Consumers will be protected against deception and fraud, and the sector that was damaged by the FTX collapse can regain trust.”
EU Commissioner for Financial Services, Financial Stability and Capital Markets Union Mairead McGuinness said:
“I welcome the European Parliament’s vote today to approve comprehensive EU rules on crypto: a world first. We’re protecting consumers and safeguarding financial stability and market integrity.”
MiCA
The new crypto licensing regime — widely considered the first comprehensive rule set for the crypto industry in the world — received 517 votes in favor and only 38 against. The remaining 18 votes were abstentions.
MiCA will cover all cryptocurrencies and companies offering crypto-related services that do not fall under the purview of current financial legislation.
Under the rules, companies operating in the crypto industry will be required to adhere to rules covering “transparency, disclosure, authorization and supervision of transactions.”
The regime will also establish a framework for issuing cryptocurrencies and will also regulate “public offers” of crypto assets.
Additionally, the European Securities and Markets Authority (ESMA) will be tasked with identifying and keeping track of companies that are operating in the EU without authorization or found to be non-compliant with the new rules.
Transfer of Funds rules for crypto
The plenary also voted in favor of adopting the new Transfer of Funds regulation that will apply the “travel rule” from traditional finance to the crypto industry.
The travel rule essentially mandates companies that allow the transfer of funds to identify and declare their customers for anti-money laundering and terrorism financing purposes. The travel rule will apply to all cryptocurrencies, including Bitcoin.
The new regulation will allow regulators to trace certain crypto transfers and block suspicious transfers. According to the announcement:
“Information on the source of the [crypto] asset and its beneficiary will have to “travel” with the transaction and be stored on both sides of the transfer.”
The Parliament clarified that this will only apply to transfers facilitated by companies or funds sent to public wallets controlled by centralized entities like an exchange and that transfers between two individuals will be exempt from these rules.
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Source: https://cryptoslate.com/eus-mica-crypto-regulatory-framework-passes-final-parliamentary-voting/