Is the crypto ecosystem threatened by MiCA?

Source: unsplash.com/ Christian Lue

The European Union is preparing to settle Mika (European Union Markets in Crypto Assets), a series of regulations aimed at the crypto sector within the European Economic Area.

After finalizing the MCA last September, the European Parliament voted in favor of the package of laws in October, however there remains one last voting session before the final application of the text.

Feedback on the implementation of the MCA

MiCA covers the entire crypto industry today, from crypto mining to stable currency passing through NFTs, as well as the use of cryptocurrencies in illegal activities such as money laundering. However, it is important to note that there are clauses, seemingly innocuous, that may well affect influencers in the crypto sector.

Patrick Hansen, the entrepreneur and CEO of Circle, tweeted a message about one of these clauses. According to the text, crypto industry influencers who speak out on social media and somehow generate profits from the speech without mentioning it could face legal action.

Indeed, with MiCA this profit will be considered by European Union regulators as market manipulation once the law comes into force. At the moment, there are no clear and precise restrictions on this clause that can also apply to memes, including the most trivial ones.

There is also no information about the implementation of such a clause in practice. But the general idea is that the European Union wants to clean up.

Is the crypto ecosystem threatened by MiCA?

In the beginning, this will undoubtedly risk damaging the crypto ecosystem, but in the long term it is possible that the sector will benefit from an increase in regulations. This is due to the increasingly strong demand from institutional investors who wish to have a well-defined and above all stable legislative framework.

Regulators are confident that these regulations will make the crypto industry more attractive. Regarding this, Stefan Berger, a German politician, says:

“This regulatory process is necessary if Europe is to become a significant player in the crypto scene in the coming years. »

However, we note that MiCA risks presenting a number of problems for decentralized finance, which is currently in full swing, in the name of consumer protection. There is a significant risk that Challenges is centralized after this increase in controls.

The main aim of MiCA remains focused on cleaning moneythe central point of the bill that would make most crypto businesses follow the same rules as the banking industry for example.

Regulators had previously announced that companies offering crypto services would be required to collect information during transfers of crypto assets, both for the sender and the receiver. The stated objective is to make it difficult to use cryptocurrencies in criminal activities.

According to the latest information, it is likely that MiCA will become effective and be applied systematically to the entire European crypto landscape. 2024.

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