The European Parliament has approved the EU Cryptocurrency Regulation Bill (MiCA), which will set clear standards for the industry and protect crypto investors.
The MiCA regulatory framework was supported by 517 members of the EU Parliament, 38 people voted against. The bill came almost five months after the infamous FTX crash, so MiCA aims to prevent such situations from happening.
Politicians also supported a separate law requiring virtual asset service providers (VASPs) to identify their customers making any transfer of funds in order to prevent money laundering. The so-called Travel Rule, proposed by the International Financial Action Task Force on Money Laundering (FATF), will apply to cryptocurrency transactions, which will allow information about the source of assets. This will apply to crypto transactions over €1,000 (about $1,100) made by private users.
European Commissioner for Financial Services Mairead McGuinness called the MiCA legislation the world’s first comprehensive rules for cryptocurrencies. These standards need to be implemented as soon as possible to avoid the multiple bankruptcies and scandals that hit the industry last year, the commissioner said.
“We are introducing security measures that will prevent companies operating in the EU market from using the methods that contributed to the collapse of cryptocurrency companies. As we have seen in recent months, strict rules and oversight are sorely needed because without them, FTX, Terra, Celsius and Voyager collapsed,” said McGuinness.
Binance CEO Changpeng Zhao also commented on Twitter on the adoption of MiCA, calling it a pragmatic decision that one of the world’s largest markets introduces specific rules for cryptocurrencies to protect users and support innovation.
The European Parliament voted for MiCA to be implemented.
This means one of the world’s largest markets is introducing tailored regulations for crypto to protect users and support innovation.
The fine details will matter, but overall we think this is a pragmatic solution to… — CZ Binance (@cz_binance) April 20, 2023
However, not all European regulators are happy with the MiCA bill. Recently, the chairman of the Dutch Financial Markets Authority (AFM), Laura van Geest, called it too “soft” for cryptocurrencies, which she says are used for fraud and manipulation.
