EU moves to rein in ‘wild west’ of crypto assets with new rules

theguardian.com:

The EU has moved to rein in the “wild west” of crypto assets by agreeing a groundbreaking set of rules for the sector.

Representatives from the European parliament and EU states thrashed out an agreement on Thursday that contains measures to guard against market abuse and manipulation, as well as requiring that crypto firms provide details of the environmental impact of their assets.

“Today, we put order in the wild west of crypto assets and set clear rules for a harmonised market,” said Stefan Berger, the German MEP who led negotiations on behalf of the parliament.

Referring to the recent slump in cryptocurrency prices – the total value of the market has fallen from $3tn (£2.5tn) last year to less than $900bn – Berger added: “The recent fall in the value of digital currencies shows us how highly risky and speculative they are and that it is fundamental to act.”

The markets in crypto assets (MiCA) law is expected to come into force at about the end of 2023. Globally, crypto assets are largely unregulated, with national operators in the EU required only to show controls for combating money laundering. The MiCA law is also expected to set a benchmark for other regulatory regimes for crypto globally.

Cryptocurrency is the term for a group of digital assets that share the same underlying structure as bitcoin: a publicly available “blockchain” that records ownership without having any central authority in control.

The sector’s supporters have said it represents a good investment because, for instance, it carries low fees and, unlike conventional currencies, is not tied to governments. However, its detractors say a lack of regulatory oversight or implicit government support, because of crypto and bitcoin’s independent origins, make