European Union’s Financial Regulator Initiates Three-Stage Consultation on MiCA Framework
The European Union’s financial regulator will initiate a three-stage consultation concerning the freshly accepted Markets in Crypto-Assets (MiCA) framework.
On June 12, the European Securities and Markets Authority (ESMA) published a notice on its website indicating that, as of July 2023, the authorization, governance, conflicts-of-interest and complaint-handling procedures of MiCA will be subject to consultation packages that will require approval by the European Commission, European Parliament and European Council.
The initial consultation package will encompass technical specifications concerning the utilization of crypto asset service providers within the EU, as well as methods for processing grievances and revealing possible conflicts of interest. The second, planned to commence in October, will examine disclosures of data to investors, governance stipulations for crypto companies, and “sustainability indicators and negative effects on climate.”
According to ESMA, a last consultation, anticipated during the initial three months of 2024, could contemplate investor protection and regulations to oppose market manipulation. The MiCA scheme proposed a timeline of approximately 18 months for the complete implementation, with all regulations becoming effective starting in December 2024.
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In September 2020, the European Commission first proposed MiCA, which was then approved by the Economic and Financial Affairs Council of the European Union in a vote on May 2023. ESMA declared that the framework had “come into effect” as of June, but regulators and legislators are still examining suggestions to guarantee a smooth implementation of the crypto-related legislation.
As crypto industry executives contemplate where to conduct business, the regulatory clarity of digital assets is often a major topic of discussion. MiCA seeks to establish a unified regulatory system for crypto within the European Union, while the United States has been criticized for its “regulation by enforcement” approach.
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