MICA to RegRally: The Crypto Guide – Europe, June 2024

ECOVIS ProventusLaw brings you a curated selection of significant developments from the European crypto regulatory landscape in June 2024.

Tether CEO Criticizes MiCA’s Bank Deposit Rules

Tether CEO Paolo Ardoino criticises the EU’s MiCA regulations for requiring stablecoin issuers to hold 60% of reserves in bank deposits, citing the negligible EUR 100,000 insurance cap compared to Tether’s $110 billion market cap. Ardoino argues this increases risk, referencing recent bank failures and emphasising Tether’s preference for short-term U.S. government obligations to ensure greater security and stability for stablecoins. Read more

EU Reviews Crypto Eligibility for UCITS Investments

The European Securities and Markets Authority (ESMA) is reviewing the inclusion of cryptocurrencies in UCITS (Undertakings for Collective Investment in Transferable Securities) funds. This assessment, requested by the European Commission, aims to align UCITS rules with market developments. ESMA seeks feedback on the impact of allowing crypto investments on investor protection and market stability, with a focus on liquidity and risk diversification. The review could significantly change how digital assets are regulated within European investment funds. Read more

EU Council Approves AI Act

The EU Council has approved the AI Act, the world’s first legal framework for artificial intelligence. Effective next month, with full implementation in two years, the Act aims to ensure safe and trustworthy AI development, exempting systems used for military and research. It establishes an AI office and a scientific panel to enforce regulations and provide guidance, positioning the EU as a leader in ethical AI development. Read more

Turkey Introduces Comprehensive Crypto Asset Regulation

Turkey’s Grand National Assembly received a draft bill on May 16, 2024, to regulate crypto assets and platforms. The legislation mandates crypto service providers to obtain permits, establish secure systems, and comply with specific audit requirements. It emphasises user protection by separating platform and user assets, imposing severe penalties for unauthorised services and non-compliance. This move aims to enhance transparency and security in Turkey’s burgeoning crypto market. Read more

Clearstream, DTCC, Euroclear Unveil Digital Assets Framework

Clearstream, DTCC, and Euroclear have released a comprehensive digital assets framework developed with Boston Consulting Group. The framework, “Building the Digital Assets Ecosystem,” outlines six principles to ensure successful tokenisation of digital asset securities, emphasising legal certainty, regulatory compliance, security, asset safeguarding, interoperability, and scalability. This initiative addresses fragmentation in the digital securities sector and fosters industry collaboration to integrate digital assets into the global financial system. Read more

The AMF reminds the public that the crypto asset trading platform BYBIT is blacklisted

The Autorité des Marchés Financiers (AMF) calls on retail investors to exercise the utmost vigilance regarding proposal investments made to the public residing in France by the digital asset trading platform BYBIT. BYBIT is not authorised to provide its digital asset services in France. The AMF reserves the right to take legal action to block the platform’s website. Read more

Blockchain-Powered Polling App to Challenge Putin in 2024 Russian Election

Mark Feygin, a human rights activist, launches Russia2024, a blockchain-powered app to enable anonymous political engagement in the 2024 Russian presidential election. Using zero-knowledge proofs and biometric verification, the app allows citizens to vote, sign petitions, and protest without fear of reprisal. Developed by Rarimo, this app aims to empower individuals in repressive regimes by leveraging blockchain technology to safeguard anonymity and public sentiment. Read more

UK Report Identifies Crypto as Major Money Laundering Risk

A UK government report highlights cryptocurrency as a significant money laundering risk in 2022-2023. The report indicates that criminals increasingly use digital assets to launder money due to their anonymity and global reach. It calls for stronger regulatory measures and international cooperation to combat these activities and ensure the financial system’s integrity. Read more

EU Designates MEV as Illegal Market Abuse Under MiCA

The European Union has classified Maximum Extractable Value (MEV) as illegal market abuse under the Markets in Crypto-Assets (MiCA) regulation. MEV involves miners or validators manipulating transaction orders for profit. The European Securities and Markets Authority (ESMA) demands trading platforms report suspicious MEV activities to prevent market manipulation. This move aims to enhance transparency and integrity in the crypto market as part of MiCA’s broader regulatory framework. Read more

EU Urged to Prepare for Blockchain and AI Convergence

The European Blockchain Observatory and Forum (EUBOF) recommends the EU prepare for blockchain and AI integration. EUBOF’s report highlights blockchain’s potential in securely storing sensitive AI data, particularly in healthcare and finance, promoting decentralised AI networks, and enhancing smart contract functionality. The convergence aims to reduce data monopolies and support collaborative AI development. EUBOF suggests that the EU act as a global knowledge hub and engage various stakeholders in addressing innovation-related issues. Read more

More about European Crypto Licence and MiCA.

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