The first quarter of 2023 will see a major crackdown on US cryptocurrencies, raising concerns about innovation and capital flight.of close Signatory Bank, SEC bring the action Genesis, Gemini and the CFTC’s complaint against Binance is seen by many as a targeted crackdown. The European Union (EU), meanwhile, is looking to provide a regulatory framework that protects consumers and encourages innovation. However, whether the EU can become a crypto-friendly hub is still up for debate.
In this article, Portuguese lawyers Joao Duarte PereiraUnstoppable Finance Co-Founder and CTO Peter Groskopand Annerton Attorneys and Partners Alireza Siadat Analyze the EU’s approach to cryptocurrencies compared to the US.
MiCA Promise
João emphasizes the importance of Crypto Asset Market (MiCA) regulation in addressing EU concerns over financial stability and consumer protection. “MiCA should be seen as a work in progress, a dialogue with the industry to build mutually beneficial relationships and accelerate growth and innovation.” We believe we should welcome a fair balance of , ultimately benefiting the industry.
Peter and Alireza believe the EU is ahead of the US in developing clear regulations. Peter stressed that “Europe is leading the regulation of data privacy with the GDPR and will do the same for the cryptocurrency industry,” while Alireza said that the EU’s fragmented market is a key factor in the standardization of European regulations. He also said that “the EU is on a better trajectory than the US for taking the right steps and assessing the problem in 2019.” The need for a holistic regulatory framework to eliminate regulatory arbitrage and ensure a common understanding across the single market is driving the EU’s approach.
Without a clear separation of powers, unfair enforcement reigns
Peter and Alireza criticize recent execution-based approaches in the United States, saying they make it difficult for market participants to comply with unclear rules and increase firms’ operational risk. According to Alireza, the U.S. approach to cryptocurrencies is flawed due to the dilute separation of powers, and the regulators supposed to oversee and oversee the eventual development of new laws. , will be enforced.
Over the past two years, incidents like Celcius, FTX, SVBVB, and Silvergate have led regulators to take a more rigorous approach. Alireza stresses that regulators have blamed cryptocurrencies for her FTX and her SVB incidents, but in reality the downfall of these organizations has nothing to do with cryptocurrencies. There was no.
When asked about recent SEC news To Coinbase, Peter agrees that treating crypto innovators fairly can be difficult. He suggests that “regulators must act carefully to avoid moving technology to other jurisdictions.” Recently, many people see his interpretation of BaFin as less suitable for cryptocurrencies.
Regulators playing nice could be the future of innovation
But Alireza believes that in the EU, “the situation in theory certainly looks better than reality.” In recent years, German regulator BaFin has taken an unfriendly and sometimes inconsistent approach to interpreting and enforcing cryptocurrency companies. Alireza noted that about 20 companies are now waiting for confirmation from BaFin on her license application for more than 800 days.
The EU is more friendly to cryptocurrency companies than the US, but a large number of such companies are entering the EU despite the EU’s efforts to balance fostering innovation with ensuring financial stability and consumer protection. Less likely to leak. According to Alireza, crypto hotspots are likely to become fragmented, with companies offering more complex products such as DeFi likely to be more crypto-friendly as governments aggressively push the crypto agenda. It will be established in places like Dubai and other markets eager to be considered.
Despite inconsistencies and delays by regulators in some EU countries, Peter, Alireza and João agree that the EU will serve as a global model for dealing with the complex world of crypto regulation.
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