In the European Parliament’s investigation into FTX’s collapse, many European lawmakers demanded that the proposed markets in crypto assets rules (MiCa) be approved immediately.
They allegedly claimed that if the European Union (EU) rules had been followed, the tragic occurrence of the collapse would never have occurred.
The EU wants MiCA to go into effect as soon as possible.
The much-anticipated European Parliament hearing on the collapse of FTX and its implications for the European Union is currently underway. According to live feeds, the European Commission is pleading for the MiCA to be passed immediately.
Furthermore, a senior EU official claimed that the various unhealthy and questionable practices at the FTX that led to its demise could have been avoided if European Union rules had been in place. He went on to say that the Bitcoin crash created a general winter environment for the cryptocurrency industry. As a result, FTX declared bankruptcy earlier this month.
In addition, BlockFi, another crypto platform, reportedly filed an insolvency protection form earlier today. The European Union members unanimously agreed that the cryptocurrency industry needed to be regulated and urged the parliament to pass and implement the MiCA bill as soon as possible.
Prior to the demise of FTX, the MiCA bill was supposed to go into effect 18 months after it was approved. However, with the recent collapse of FTX, the Union is persuading parliament to move the implementation date forward.
The European Union(EU) members fault the absence of regulation for FTX fall
Jour-Schroeder informed the parliament that the commission did not blame crypto assets or blockchain for the collapse, but rather the lack of a body to oversee the firm’s questionable activities.
According to the deputy, if this trend continues, many investors will be forced to move their assets from custodial platforms to private wallets, exposing them to a new set of financial risks.
She stated that the EU’s priority in preventing migration is to have a standard in place, such as MiCA, to ensure the funds and rights of investors and the nation are well protected. She also stated that once centralized exchanges are regulated, the EU will most likely look into regulating cryptocurrency lending and the decentralized finance industry.
Furthermore, Steffen Kern, Head of Risk Analysis and Economics at the European Securities(ES) and Markets Authority (ESMA), stated that the entire cryptocurrency market stinks of poor governance, market abuse, and a lack of regulations. He said that once a regulatory framework is implemented in the market, all of the problems will vanish.