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The ESMA is seeking feedback on the first of three planned consultation packages, while the European Banking Authority has issued its own guidance to prepare institutions for new legislation.
The EU’s financial markets regulator has revealed its first batch of proposed rules to rein in the cryptocurrency sector.
The European Securities and Markets Authority (ESMA) said this is the first of three consultation packages designed to show exactly how upcoming crypto regulation in the EU will work.
Meanwhile, the European Banking Authority also published a statement to help prepare financial institutions in the crypto sector to prepare for upcoming regulation.
The proposed rules relate to Markets in Crypto Assets (MiCA), a landmark piece of legislation that aims to govern and safeguard the sector and its customers. This legislation was approved by EU lawmakers in April.
The ESMA is seeking input from relevant stakeholders on the proposed rules for crypto-asset service providers (CASPs). This first package includes rules around identifying and managing conflicts of interests, along with how these providers should address complaints.
ESMA chair Verena Ross said this first consultation is an “important milestone” for MiCA, as it translates the plans to set high regulatory standards for the sector into “concrete requirements”.
“We are determined to ensure entities involved in crypto-asset related activities understand that the EU is not a place for forum-shopping,” Ross said. “We also want to remind consumers that, even with the implementation of MiCA, there will be no such thing as a safe crypto-asset.”
The regulator ESMA aims to gather more insight on the current and planned activities of respondents, in order to “better understand the EU crypto-asset markets and their future development”.
The deadline to submit comments on this consultation package is 20 September. The ESMA plans to submit the draft technical standards to the European Commission for endorsement by 30 June 2024 “at the latest”. The regulator also plans to release a second consultation package in October of this year.
The crypto sector suffered some regulatory hits last month in the US, as the Securities and Exchange Commission sued both Coinbase and Binance in the same week.
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