Today, the European Union
approved a comprehensive set of cryptocurrency regulations seeking to lay the groundwork for how crypto is regulated globally. The rules - which make providers liable if they lose investors' crypto assets - will go into effect in 2024 across 27 EU member states.
"I am very pleased that today we are delivering on our promise to start regulating the crypto-assets sector," Elisabeth Svantesson, Sweden's minister of finance, said in a press release. "Recent events have confirmed the urgent need for imposing rules which will better protect Europeans who have invested in these assets and prevent the misuse of crypto industry for the purposes of money laundering and financing of terrorism." Among recent events spurring the legislative push was the collapse of FTX, Mairead McGuinness, the European commissioner for financial services, told CNBC late last year. FTX was one of the world's largest cryptocurrency exchanges, and its implosion led to $8 billion in customer losses, the United States Commodity Futures Trading Commission estimated.
To better protect crypto investors, the EU's rules ensure that crypto assets can be traced - just like money transfers - and suspicious transactions can be blocked. They also provide "enhanced consumer protection and safeguards against market manipulation and financial crime," EU lawmakers
announced.
The rules do not apply to person-to-person transfers but do cover transactions above 1,000 euros from self-hosted wallets any time they connect to wallets hosted by crypto-assets service providers.
Other key features of the sweeping regulations include requirements for crypto providers. For one, they will have to disclose their energy consumption to help the EU monitor the high carbon footprint of cryptocurrencies. For another, all providers will need a license to issue, trade, and safeguard crypto assets, tokenized assets, and stablecoins. Anyone operating without a license will be included in a European Securities and Markets Authority public registry to document their non-compliance and help prevent money laundering, terrorist financing, and other criminal risks. "This regulatory framework aims to protect investors, preserve financial stability, while allowing innovation and fostering the attractiveness of the crypto-asset sector," today's press release said.
arstechnica.com
