The European Parliament has decisively passed the Markets in Crypto-Assets (MiCA) regulations, marking a significant milestone in the governance of the cryptocurrency industry. A vote tally of 517 in favor and 38 against underscores the strong support for these new measures, which have already received approval from EU member states.
As the first comprehensive regulatory framework for the crypto sector globally, MiCA mandates that companies wishing to operate within the European Union must secure a license. These firms will also be required to adhere to stringent anti-money laundering and anti-terrorism financing regulations. Notably, “significant” service providers must disclose their energy consumption as part of efforts to address the environmental impact associated with the industry.
Additionally, a separate regulation concerning the Transfer of Funds was passed with a vote of 529 to 29, which necessitates that cryptocurrency businesses identify their customers.
The implementation of MiCA will unfold in phases, commencing in July of next year. Mairead McGuinness, the EU financial services commissioner, has urged other regions to adopt similar standards, suggesting that had the ill-fated FTX been subject to EU jurisdiction, many of its questionable practices would have been prohibitive under MiCA.
However, as highlighted by Anna Carrier, a legal consultant at Norton Rose Fulbright, the industry must act with urgency to prepare. The relatively short timeframe for implementation and the need for technical secondary legislation to be established means that companies will face a challenging few months ahead as they strive to align with these new regulations.