Technology

The EU introduces new crypto rules to protect against fraud and climate impact

Europe and its member states have tentatively agreed on new crypto regulations designed to protect consumers and service providers, the European Parliament announced. It’s called “MiCA” (Markets in Crypto-Assets) and is designed to protect against things like fraud, criminal activity, climate impact, and more.

“In the wild west of the crypto world, MiCA will be a global standard setter,” German MEP Stefan Berger said in a statement. “MiCA will ensure a harmonized market, provide legal certainty for issuers of crypto assets, guarantee a level playing field for service providers and ensure high standards for consumer protection.”

A new legal framework aims to protect market integration by regulating public crypto offerings. A key provision is a public register maintained by the European Securities and Markets Authority (ESMA) to address money laundering concerns. Large crypto asset service providers (CASPs) are also required to disclose energy consumption and report data on environmental and climate impacts to their national authority, which in turn will report to ESMA.

This new regulation strengthens the European anti-money laundering framework, reduces the risk of fraud and makes crypto-asset transactions more secure. The EU travel rule will ensure CASPs can prevent and detect sanctioned addresses and that the transfer of crypto assets is fully traceable.

The law covers cryptocurrencies like bitcoin and ether, but NFTs (non-fungible tokens), including “movie tickets, digital collectibles from clothing brands, or in-game items in computer games,” are exempt. However, these could later be reclassified under the rules as financial instruments or crypto assets subject to the MiCA.

The law is still preliminary, with important details such as whether CASPs need to be based in the EU still being discussed Bloomberg. An earlier version of the draft, first proposed in 2020, included a provision banning bitcoin and other cryptocurrencies that used energy-intensive mining processes. However, these were later removed after industry complaints.

The news follows a bad run for crypto, with the collapse of TerraUSD and other tokens, a freeze on Celsius withdrawals, and an overall drop in the market. The US has yet to implement its own crypto rules, but US Senators recently introduced a bipartisan bill that aims to do just that.

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https://www.engadget.com/the-eu-introduces-new-crypto-rules-to-protect-against-fraud-and-climate-impact-083250933.html?src=rss The EU introduces new crypto rules to protect against fraud and climate impact

Russell Falcon

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