European Parliament agrees on preliminary cryptocurrency regulation

The European Parliament passed a preliminary framework for the crypto space aimed at increasing standards and requirements for digital asset companies.

Fast facts

• The European Parliament’s Committee on Economic and Monetary Affairs announced on Monday that lawmakers overwhelmingly approved the Markets in Crypto Assets Regulation (MiCA) and the Transfer of Funds Regulation.

• A major part of the Transfer of Funds Regulation is the requirement that digital assets transferred through third parties must always be traceable, along with the ability to block suspicious transfers.

• Traditional financial transactions are subject to similar laws, with information on the source of the asset and its beneficiary stored on both sides of any given transfer. Personal, non-custodial wallets are exempt from sharing this information with authorities if requested during an investigation. 

• Accordingly, MiCA requires crypto asset service providers to publish an official “crypto-asset white paper” describing their offerings.

• The bill would also require cryptocurrency mining companies to publicly disclose their energy consumption data in a prominent location on their website. 

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