On 20th April, the European Parliament voted in favour of new crypto rules which will bring comprehensive regulation to the industry. The Markets in Crypto-Assets (MiCA) regulation and rules surrounding crypto transfers were passed with overwhelming support, with 517 votes in favor, 38 against, and 18 abstentions. The new regulatory regime is expected to come into force in 2024 and will be fully implemented within the next two years.
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.”
The European Parliament has voted in favor of the Markets in Crypto-Assets (MiCA) regulation, which will bring comprehensive regulation to the crypto industry.
The MiCA regulation will cover all cryptocurrencies and companies offering crypto-related services that do not fall under current financial legislation. Companies operating in the crypto industry will be required to adhere to rules covering transparency, disclosure, authorisation, and supervision of transactions.
MiCA will also establish a framework for issuing cryptocurrencies and will regulate public offers of crypto assets. The European Securities and Markets Authority (ESMA) will be responsible for identifying and tracking companies that are operating in the EU without authorisation or found to be non-compliant with the new rules.
The new regulatory regime is expected to come into force in 2024 and will be fully implemented within the next two years.
Transfer of Funds
The European Parliament also approved the new Transfer of Funds regulation, which applies the “travel rule” from traditional finance to the crypto industry. The travel rule mandates companies that allow the transfer of funds, to identify and declare their customers for anti-money laundering and terrorism financing purposes.
This rule will apply to all cryptocurrencies, including Bitcoin, and will allow regulators to trace certain crypto transfers and block suspicious transfers. The new regulation specifies that 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.
Transfers between two individuals will be exempt from these rules, and the regulation will only apply to transfers facilitated by companies or funds sent to public wallets controlled by centralised entities like an exchange.
How Neopay can help
As compliance specialists, Neopay can help firms navigate the complex regulatory landscape and provide guidance on how to adhere to MiCA regulations. Contact us to find out how we can support your business.