Cryptocurrency regulations in Europe keep changing with the possible ban of a certain category of token.
Cryptocurrency regulations say goodbye to private tokens
As we get ever closer to the 2023 release of the MiCa law, regulators are still examining the text to finalize it. If the latter had previously agreed on a version, some latest changes are planned to allow ever closer monitoring of the use of cryptocurrencies in Europe.
Indeed, some MEPs, at the urging of Czech officials chairing the debates, would like to ban the use and possession of cryptocurrencies while allowing people to remain anonymous. Therefore, tokens that encrypt sender and recipient addresses, such as Monero or Zcash, would simply be banned from the European Union. Neither banking institutions, trading platforms nor individuals will have the right to take refuge behind them. In other words, the intention of MEPs is simple: to prevent users from evading surveillance and tracking of transactions using private currencies.
It would therefore appear that only pseudonymous cryptocurrencies will have the right to be used since they do not challenge the regulators’ right of scrutiny. For now, the ban on anonymous coins is only at the proposal stage. Both the European Parliament and the European Commission are expected to look into the issue in the coming days. However, it is entirely possible that this initiative will actually be adopted as it would allow for the application of the MiCa law in all situations. However, European regulators have yet to comment on crypto mixers or open source exchanges whose transactions are processed in-house. Anonymity has therefore not completely disappeared at the moment.
The collapse of FTX only gives the regulators a hard time
The European Union aims to finalize its MiCa law as soon as possible, but this without taking into account the fall of FTX, which has brought the entire crypto ecosystem into question. The exchange, which was considered the safest in the industry, caused a sensation when all its management problems were discovered and it entered bankruptcy. With Binance CEO Changpeng Zhao already announcing new measures all players should take to protect their users and prevent further similar disasters, regulators feel compelled to follow suit. In fact, many crypto figures are asking for a revision of the current regulations in favor of more precise and above all stricter texts.
According to comments released by an MEP to Bloomberg, the European Commission remains on the alert for all the news regarding the FTX affair. Although this incident has no consequences on the finalization of the MiCa law, implying that it will be adopted as-is after the last negotiations in November, the European Union is already preparing to amend the latter if necessary. The conclusions that will be drawn from the collapse of the Sam Bankman-Fried empire will therefore have an impact on crypto regulation, but this will not be immediate. However, industry players can prepare for more changes in the coming months.
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