FTX failure, Binance’s US settlement presents a strong case for MiCA regulations

In the year The collapse of FTX in 2022 and Binance's recent $4.3 billion deal with US authorities will provide a strong argument for EU markets on the provisions of the Crypto-Assets (MiCA) law, a European Commission official said in an interview.

Evan Keller, European Commission policy officer, spoke to Cointelegraph at the MoneyLIVE conference in Amsterdam. News of Binance's high-profile settlement with the US Department of Justice (DOJ) broke the night before Keller's keynote and served as an important reflection on the full-scale application for the MCA in 2024.

“I think we have a lot of sad evidence that goes down that strong regulatory path. FTX was definitely one of the big ones, and now recently with Binance,” Keller explained.

“Our position is that this rulebook will reduce some risks and, importantly, give regulators more transparent controls and powers to control these entities and be able to reduce those risks.”

The policy officer gave an updated view of the path towards full application of the MCA across the EU. Internationally considered to be one of the first comprehensive cryptocurrency legal frameworks, the rules laid down by the MCA apply to all EU member states.

Keller explained that MiCA's mission is to promote innovation while addressing threats to consumerism, market integrity, financial stability and monetary sovereignty. The scope of the regulations covers crypto assets and crypto asset service providers and aims to address market abuse.

The MCA came into effect in June 2023, but the implementation of regulations governing “asset-based tokens” and “e-money tokens”, which mostly fall under the umbrella of stablecoins, is expected to take effect in June 2024.

After that, the rules for “crypto-asset service providers”, which include trading platforms, wallet providers and cryptocurrency exchanges and services, will come into effect in December 2024.

Keller added that the European Securities and Markets Authority and the European Banking Authority are developing a number of technical standards covering a wide range of proposals.

“There are about 40 technical standards being developed now. They have already consulted the public very well, and it continues. Then they finalize that and send it to the commission as a draft,” explained Keller.

Then the commission accepts the completed standards as a draft, which must be taken into internal procedures. Lawmakers, Parliament and the European Council will have a two-month investigation period.

“Hopefully, that will be enough for MCA ‘Phase One', which is the statscoins phase, to be operational by June 2024.

Keller also said that cryptocurrency service providers have been given ample time to integrate the promises made during the MCA's consultation process.

“It's been a good 18 months since the text was negotiated. The proposal has been out for a long time, and a lot of these things are borrowed from the traditional rule book,” Keller said.

The “grandfather clause” in MiCA allows CASPs to continue to operate under national laws applied by EU member states, he added. However, these operators cannot provide “passport” services throughout the European Union.

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