According to DLNews, crypto businesses may face suspension of services in the European market, valued at nearly $1 trillion, unless they are granted additional time to comply with the European Union’s new Markets in Crypto-Assets (MiCA) regulation.
The Issue at Hand
A letter addressed to the European Securities and Markets Authority (ESMA) by several crypto and blockchain trade associations warns that without an extension, the market’s reputation and customer interests could be at risk. The letter highlights potential negative financial impacts across EU member states if compliance is not achieved in time.
MiCA Implementation Timeline
The next phase of MiCA’s implementation is scheduled for December 30, introducing new regulations for crypto asset service providers (CASPs), including exchanges, wallet providers, and custodians. While these regulations are seen as a catalyst for the crypto industry’s growth in Europe, industry representatives express concerns over the perceived slow response from regulators, which may hinder their ability to capitalize on this opportunity.
Concerns Over Regulatory Uncertainty
Crypto firms cannot authorize firms until they receive ESMA’s rules, which were submitted to the European Commission on October 16 and endorsed on October 31. This leaves EU state regulators with limited time to publish their authorization requirements and approve firms by the December 30 deadline.
Grace Period Insufficient
MiCA offers a grace period of up to 18 months for firms to transition from existing local CASP regulations to MiCA. However, the trade associations argue that this grace period is insufficient, as crypto firms may still need to cease cross-border services.
Request for Extension
The letter emphasizes the threat to MiCA’s passporting provisions, which allow CASPs authorized in one state to offer services across the EU. The trade associations urge ESMA to extend the grace period for MiCA authorization to the end of June, which would reduce regulatory uncertainty and enable CASPs to continue services while applications are processed.
Possible Solution
Vyara Savova, a senior policy expert with the European Crypto Initiative, suggests that ESMA could also address the issue by advising member states to harmonize their timelines and extend their grace periods. ESMA has not yet responded to the request for comment.
Etiketler: [Crypto Regulation, MiCA, EU Markets, Blockchain]
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