Cryptocurrency regulation is a black-and-white matter depending on one’s perspective, but politicians in the European Union tend to favour a spectrum.
New crypto rules in the European Union (EU) seem based on flawed reasoning, according to contentious research issued by the European Parliament only last week.
The research, conducted by a group of academics, rejected the idea that cryptocurrencies should be subject to less stringent regulations than those that apply to regular stocks and bonds.
Authors argue that immediate action is needed to rein in the illegal behaviour uncovered recently and that the bloc’s much-touted Markets in Crypto Assets law, MiCA, has so many loopholes that it will deliver little advantages and might create a regulatory vacuum.
In the United States, the crypto legality argument is very contentious. The crypto asset sector is a terrible place to litigate, as businesses like Ripple, Coinbase, and Binance can attest. To make matters worse, securities regulations often restrict the trading of regulated items to specific, authorised exchanges, but cryptocurrency is designed for use in direct blockchain-based transactions.
Francesco Paolo Patti, an associate professor at Italy’s Bocconi University, argues that the report published last week is faulty because it simplifies the application of securities legislation into black and white, whereas MiCA produces a spectrum.
Since various sections of the EU, like Italy and Germany, have different opinions about what constitutes a security, he added, classifying cryptocurrencies as conventional financial instruments might impede MiCA’s objective of having a single licence to trade throughout the union. He also said that FTX has a right in Cyprus to operate under the EU’s current financial-market standards, known as MiFID, but that this wouldn’t prevent the types of terrible occurrences observed lately in crypto markets.
Financial law expert and research co-author Dirk Zetzsche of the University of Luxembourg dismisses such claims, arguing that tried-and-true financial regulations are necessary.
Also Read: El Salvador Launches “Volcano Energy” With A 241 MEGAWATT Bitcoin Mining Facility
Wallets