EUROPE REACHES AN AGREEMENT REGARDING CRYPTO REGULATIONS BUT INDUSTRY CLAIMS THERE’S STILL MORE TO BE DONE!

Rebecca Rettig, general counsel for decentralized finance (DeFi) platform Aave (AAVE) and a board director at the crypto-friendly Silvergate Bank, praised the effort to provide clarity in the crypto space and in Europe. She said they have been requesting for years. After the European Union reached an agreement on crypto-asset regulation that lays out strict rules for all actors in the crypto market. However, there is still work to be done.

The DeFi industry now needs to ensure that politicians understand the technology and that DeFi “must be regulated differently” than centralized crypto actors. She continued, given how DeFi will be on the EU’s radar next.

The new rules have reached a provisional agreement on the long-awaited Markets in Crypto-assets (MiCA) regulatory framework. Which holds so-called crypto asset service providers (CASPs) significantly more accountable than before.

In addition to publishing a report on the environmental effects of crypto assets within two years, the European Commission would also establish “mandated minimum sustainability requirements” for consensus processes like proof-of-work.

The recently concluded agreement also states that the European Banking Authority will be responsible for maintaining a current list of service providers who do not follow EU regulations.

Additional measures will be implemented for service providers whose parent company is based in countries designated by the EU as non-cooperative for tax reasons. Or countries with a high risk of money laundering. This includes “enhanced checks” following the EU’s anti-money laundering framework.

Before going into effect, the new rules must still be approved by the European Council and the European Parliament.

They are in addition to the Transfer of Funds Regulation (TFR) that was agreed upon earlier this week, which covered the traceability of crypto transfers and rules relating to ‘unhosted wallets.’