• The European and Securities Markets Authority (ESMA) issued a consultation paper on 12 July proposing regulations for crypto-asset markets (MiCA).
• ESMA chair Verena Ross warned consumers that there is no such thing as a “safe crypto-asset” and highlighted the risks.
• The consultation paper solicits comments from stakeholders on regulatory and technical standards, including information about expected revenue, white papers, and the usage of on-chain trading.
EU Financial Regulator Issues MiCA Proposals
The European and Securities Markets Authority (ESMA) has issued its first set of proposals around the Markets in Crypto-Assets (MiCA) regulation. On 12 July, ESMA published a consultation paper to solicit comments from stakeholders on regulatory and technical standards for crypto-assets.
Warning to Consumers
In addition to issuing its proposals, ESMA chair Verena Ross added a warning to consumers in the EU about cryptocurrencies. She cautioned them that there will be no such thing as a safe crypto-asset and highlighted the risks associated with investing in them.
Requirements for Crypto Service Providers
The consultation paper also requires applicants who provide cryptocurrency services to demonstrate that they will not mix client funds with their own assets or use them for their own account. Furthermore, they must provide information about the security of their ICT system and underlying distributed ledger technology.
Comments Due By 20 September
Stakeholders have until 20 September to file their responses regarding these proposed regulations. After which ESMA will begin another round of consultations in October focusing on sustainability and record-keeping followed by another one in early 2024 covering how foreign companies can serve EU customers.
Risk Remains High Despite Regulations
Despite these regulations being put in place, it is important for consumers to remain aware of the risks associated with investing in cryptocurrencies as Verena Ross emphasized earlier this week when she warned them about no such thing as a safe crypto asset existing yet.