EU’s crypto law gets parliament vote

The European Parliament has approved the first set of regulations in the EU designed to track transfers of cryptoassets and strengthen consumer protection. The Markets in Cryptoassets (MiCA) regulation will mandate that crypto companies must register in one of the member states of the EU before they can operate throughout the bloc.

MEP Stefan Berger, who led the creation of the MiCA regulation, stated that the law would protect consumers from fraudulent activities and help the industry recover from the FTX collapse by regaining their trust. The European Banking Authority and the European Securities and Markets Authority will enforce the regulation, which will include the adoption of risk management and governance procedures.

MiCA was approved by a majority of MEPs, with 529 in favour, 29 against, and 14 abstentions. It was provisionally agreed upon by council negotiators and parliament in June 2022. The goal of the regulation is to ensure that cryptoasset transfers, like traditional financial services, can be traced and suspicious transactions can be blocked.

This “travel rule” will necessitate that information about the origin of the asset and its beneficiary be carried with the transfer, as well as stored on both sides of the transaction. Transactions from private wallets above €1000 that interact with hosted wallets managed by cryptoasset service providers will also be covered by the legislation. Person-to-person transactions that occur without a provider or among providers acting on their own behalf are not included in the regulations.