• The European Union recently published the MiCA (Markets in Crypto-Assets) legislation in the Official Journal of the European Union.
• MiCA aims to create a consistent regulatory framework for crypto assets among member states, which will go into full effect by Dec. 30, 2024.
• The legislation includes registration and authorization requirements, security and risk mitigation measures, and protective measures against market abuse.
EU Sets Countdown to Crypto Legislation
On June 9, the European Union’s Markets in Crypto-Assets (MiCA) legislation was published in the Official Journal of the European Union (OJEU). This triggers the countdown for the law to come into effect from Dec. 30, 2024.The regulations, signed into law on May 31 after first being introduced in 2020, aim to create a consistent regulatory framework for crypto assets among European Union member states.
Registration and Authorization Requirements
While the rules officially come into force within 20 days of publication, some parts of the legislation will start to apply on June 30th , 2024 with others coming into effect six months later on Dec. 30th .Cryptocurrency service providers must meet certain registration and authorization requirements while exchanges and wallet providers must ensure sufficient security and safety measures to address potential cybersecurity and operational failures.
Risk Mitigation Measures
Stablecoin issuers must also meet certain security and risk mitigation requirements as outlined by MiCA while cryptocurrency custody services must ensure sufficient security and safety measures to address potential cybersecurity incidents or operational failures .The regulations also provide a framework to prevent market abuse such as insider trading or manipulative behavior in crypto markets .
Regulatory Action Against US Exchanges
Meanwhile crypto markets and operators in the United States are coming under increased pressure after SEC initiated regulatory action against cryptocurrency exchanges Binance and Coinbase for failure to register as licensed brokers offering unregistered securities .
Cryptocurrency proponents have welcomed MiCA legislation for creating a single market environment across Europe regarding regulatory requirements and procedures. Nevertheless, U.S exchanges remain under increased scrutiny due to recent regulatory actions taken by SEC against them .