EU rules to tame 'Wild West' crypto market

Globally, crypto assets remain largely unregulated and national operators in the EU are only required to demonstrate controls to combat money laundering.

The European Parliament and representatives from EU states have reached an agreement on the markets in crypto assets (MiCA) law, which is expected to come into force by the end of 2023. "Today, we have brought order to the Wild West of crypto assets and set clear rules for a harmonized market," said center-right MEP Stefan Berger, who led the negotiations on behalf of the Parliament. "The recent fall in the value of digital currencies shows us how risky and speculative they are and that it is fundamental to take action," Berger said. Ernest Urtasun, a Green Party lawmaker in parliament, added that MiCA will be the first comprehensive regime for cryptoassets in the world and will include strong measures against market abuse and manipulation. The new law gives issuers of crypto-assets and related service providers a "passport" to serve customers in the EU from a single base, while fulfilling capital and consumer protection rules. The United States and the United Kingdom, two major crypto hubs, have yet to approve similar rules. Crypto assets have come under pressure following the collapse of TerraUSD and luna tokens last month, and major US cryptocurrency lender Celsius Network froze withdrawals and transfers this month. Bitcoin has fallen to around $17,600 this month and traded around $18,900 on Thursday, well below its late-March high of $48,200. Thursday's talks focused on issues such as oversight of cryptoassets and energy consumption. "We agreed that crypto asset providers should in the future disclose the energy consumption and environmental impact of assets," Berger said. MEP Urtasun said EU states will be the main regulators for crypto companies, but the bloc's securities watchdog ESMA will have the power to step in if investor protection or financial stability is threatened.