Europe's securities regulator issues statement on cryptocurrency regulations
Cryptocurrency investors in Europe will have to wait until at least December 2024 for the European Union's cryptocurrency asset market rules to take effect, according to the European Securities and Markets Authority (ESMA). The ESMA emphasized that investors will not benefit from regulatory and supervisory safeguards during this period, including the ability to file complaints against crypto-asset service providers.
No guarantee of full protection until 2026
Even after December 2024, there is no guarantee that investors will be fully protected under the Markets in Crypto-Assets Regulation (MiCA) up to 2026. Member states have the option to grant crypto service providers an additional 18-month "transitional period," allowing them to operate without a license. This means that investors may not benefit from full rights and protections until as late as July 1, 2026.
Limited powers for regulatory authorities
Most National Competent Authorities (NCAs) will have limited powers to supervise those who benefit from the transitional period, relying mainly on existing anti-money laundering regimes. The ESMA warns that these regimes are far less comprehensive than MiCA.
No such thing as a "safe" crypto asset
The ESMA stresses that even after MiCA is implemented, there will be no such thing as a "safe" cryptocurrency asset. Many crypto-assets are highly speculative by nature, and investors must be aware of the associated risks.
Consultative papers and implementation phase
The ESMA recently released a second consultative paper on MiCA, with the regulations set to be enforced in June 2023. During the implementation phase, the ESMA and other authorities will consult with the public on technical standards to be published in three packages.
Introduced in 2020, MiCA aims to regulate crypto assets in Europe by amending existing laws, responding to the growing public interest in cryptocurrency investments.
