EU’s MiCA Framework Close to Final Approval
The Markets in Crypto Assets Regulation (MiCA) framework legislation aims to regulate the digital asset space. After being in the works for over two years, on October 10 the European Parliament voted in favor of the legislation and will soon go through the final plenary vote later this month. The regulatory framework drafts out laws to regulate digital assets to protect consumers and combat money laundering.
Some of the requirements:
To issue a cryptocurrency, a crypto-asset white paper must also be published with information about the project
Stablecoin companies must meet capital requirements
Large crypto miners will be required to disclose their energy consumption
NFTs will be classified as securities
Traditional securities require registration with the SEC and have tight requirements for initial public offerings (IPOs). A document such as a prospectus or official statement must be available to potential investors containing information about the company, the number of shares being offered, and other important information. While most of the currently successful cryptocurrencies were released with whitepapers, hopefully requiring the release of whitepapers will defer some scammers and provide potential investors with more information.
The Terra Luna crash and liquidity issues revealed the need for tight regulation on stablecoins.
