European Crypto Regulations Enter Final Phase

The European Parliament’s ECON Committee confirms MiCA deal, setting up the regulation to enter force in 2024

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EU flags in front of European Commission in Brussels | Source: Shutterstock

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key takeaways

  • Lawmakers voted 28-to-1 in favor of MiCA
  • The Transfer of Funds Regulation (TFR) was approved soon after MiCA deal was reached

European lawmakers overwhelmingly voted in favor of the Markets in Crypto Assets bill (MiCA) which would introduce provisions on supervision, consumer protection and environmental safeguards for cryptoassets. 

The European Parliament Committee on Economic and Monetary Affairs (ECON committee) confirmed, in a 28-to-1 vote, a preliminary deal for the new legal framework for cryptocurrency assets.

Negotiations determined that MiCA will oversee all cryptoassets which are not regulated by existing financial services legislation, and it will be up to the European Securities and Markets Authority (ESMA) to determine guidelines for what will be considered a cryptoasset subject to the new regulation.

The classification of NFTs will be determined by ESMA. Any NFT that is offered at a fixed price, including digital art collectibles, in-game clothing and cinema tickets, will not fall under the scope of MiCA. On the other hand, it is likely that NFTs which serve as financial instruments will. 

Stefan Berger, the lead member of the European Parliament (MEP) said in a statement that MiCA will set the global standard for cryptoasset regulation.

“MiCA is a European success. We are the first continent to have a crypto-asset regulation,” Berger said in a statement.

“MiCA will ensure a harmonised market, provide legal certainty for crypto-asset issuers, guarantee a level playing field for service providers and ensure high standards for costumer protection,” he said.

The following steps for this agreement will be to receive approval from the Economic and Monetary Affairs Committee, followed by a plenary vote and approval from the European Council before coming into force. 

Soon after the MiCA Vote, EU lawmakers also reached a provisional deal on the Transfer of Funds Regulation (TFR), aimed at tracing and blocking suspicious transactions. 

Ernest Urtasun, co-rapporteur for ECON, said this regulation would ensure that sanctioned addresses can fully trace cryptoassets and prevent money laundering and fraudulent activity. 

“This regulation introduces one of the most ambitious travel rules for transfers of crypto assets in the world,” Urtasun said. “We hope other jurisdictions will follow the ambitious and rigorous approach the co-legislators agreed today.”

Not everyone is happy about the TFR, however. In March, Coinbase CEO Brian Armstrong tweeted that the bill would require exchanges to report any crypto transactions over 1,000 euros to authorities, even if there is no indication of any suspicious activity.

“This eviscerates all of the EU’s work to be a global leader in privacy law and policy,” Armstrong tweeted. “It also disproportionately punishes crypto holders and erodes their individual rights in deeply concerning ways. It’s bad policy.”


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With the recent election, it’s clear that there will be a meaningful shift in crypto regulations and legislation. Trump is likely as pro-crypto as a president can be. He launched (multiple) of his own NFT collections and is launching an Aave wrapper called World Liberty Fi. He has also spoken out and mentioned that he wants to make the United States "the crypto capital of the planet" and transform it into the "Bitcoin superpower of the world". He proposed creating a strategic national Bitcoin stockpile alongside support from Senator Cynthia Lummis, promising to retain 100% of all Bitcoin held by the U.S. government. More importantly, we’re likely to see deregulation across the board in a lot of industries, with crypto being one of them - as Trump has committed to keeping the crypto market largely unregulated. Crypto, DeFi in particular, has historically been knee-capped by overreaching and hostile governmental agencies and regulation by enforcement, as evidenced by the plethora of Wells notices and lawsuits over the past few years. With Donald Trump winning the presidency, Republicans taking control of the Senate, and being on the verge of securing the House, we think it’s likely that crypto realizes positive regulatory clarity. Below, you can find our analysts’ takes:

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