EU-wide regulation calls for crypto exchanges to set up shop
Awaiting EU-wide regulation coordinating the union’s approach to digital assets, cryptocurrency exchanges have been scrambling to set up shop.
Over the past week, both Crypto.com and Coinbase secured virtual asset provider registrations with regulators in Italy, while Gemini received registration in Ireland. Meanwhile, the world’s largest cryptocurrency exchange by volume, Binance, has also managed to secure registration in France, Italy and Spain in the past month.
While the registrations do not mean that the exchanges are licensed to operate as regulated financial companies in these countries, they are an important step pending comprehensive rules known as the Regulation on Markets in Crypto Assets (Mica).
These rules were tentatively outlined by EU member states and the European Parliament earlier this month. They will enable crypto service providers to offer their services across the EU with authorization from just one national authority.
Select a state
Consequently, EU member states are also trying to get a head start before the legislation is adopted. According to Spanish MEP Ernest Urtasun, “national regulators want the exchanges to choose their member state.”
There is ample evidence for this argument, particularly among key stakeholders in France and Italy, who have reacted enthusiastically against Binance. “Look, we welcome you here,” French President Emmanuel Macron told Binance’s CEO, Changpeng Zhao, last year. “Please apply for a license.”
The EU’s crypto regulation
Last month, the EU agreed on anti-money laundering (AML) rules for cryptocurrencies that will oblige firms to check customers’ identities regardless of transaction size. The rule acts as an extension of the “travel rule” to cryptocurrencies, requiring crypto exchanges to collect information about both the sender and receiver of cryptocurrency transactions.
The European Council said the move is aimed at “making it more difficult for criminals to misuse cryptocurrencies for criminal purposes” and “will ensure the traceability of crypto asset transfers.”
What do you think about this topic? Write to us and tell us!
Disclaimer
All information on our website is published in good faith and for general information purposes only. Any action the reader takes on the information contained on our website is strictly at their own risk.
