The Markets in Crypto Assets (MiCA) bill was approved by the European Union in September. In October, members of the European Parliament voted 28 to 1 in favor of the law, which still needs to pass. The comprehensive measure addresses a wide range of topics, including money laundering, crypto mining, non-fungible tokens (NFTs), and stablecoins. But it also has provisions hidden away that might have an impact on crypto influencers.
Patrick Hansen, director of EU strategy and policy at Circle, identified one of these sections on November 1. The wording states that social media comments by crypto influencers without disclosure may result in legal consequences. Once MiCA is in effect, they will be accused of market manipulation in the EU if it is determined that they gained something from their acts, he said.
The bill is ambiguous, but it might refer to memes like the viral Doge-Twit image of Elon Musk. There was a mixed response, and several people questioned why the same guidelines did not apply to other assets, and those in favor countered that crypto influencers should be more transparent.
Regulators are confident this is a positive step to increase the region’s appeal to the cryptocurrency business. If “Europe wants to be a big player in the crypto game,” MiCA rapporteur Stefan Berger said On November 2 that these regulations are necessary.
Uncertainty exists over the monitoring and enforcement of the crypto industry. However, the EU is preparing to make life considerably more difficult for everyone involved in the cryptocurrency industry.
Additionally, the MiCA wants to control the issue of stablecoins and the providers of services for digital assets (CASPs). This would open the door for properly regulated brokers and exchanges and deter illegal activity.
The bill introduces three new subcategories of crypto assets, and the tokens are categorized based on their peg.
The consumer protection card is promoted, although the MiCA’s primary goal is the prevention of money laundering. It attempts to do this by aligning the regulations controlling cryptocurrency companies with those overseeing banks. MiCA is expected to become legislation by 2024.
In the name of protecting consumers, MiCA’s take on DeFi is too harsh. The decentralized finance sector will turn into traditional finance if every aspect of it is regulated and centralized.