During a plenary held on the 20 April 2023, the European Parliament strongly endorsed the proposed Crypto Legal Framework.
Voting on the first piece of legislation pertaining to Crypto Transfers resulted in a mere 29 opposing votes and 14 abstentions but ultimately the 529 MEPs who voted in favour carried the day in a vote that is set to change the crypto landscape significantly. The approved new legislation mandates the tracing of crypto-asset transfers with the goal of preventing money laundering and enhancing customer protection. The legislation, which was provisionally agreed upon by Parliament and Council negotiators in June 2022, covers transfers of crypto-assets over €1000 and includes information on the source of the asset and its beneficiary, which must be stored on both sides of the transaction.
The EP’s voting on the MiCA (Markets in Crypto-Assets) Regulation also had a similar outcome with 517 votes in favour, 38 opposing and 18 abstaining. This legislation includes common rules on supervision, consumer protection and environmental safeguards of crypto-assets, including crypto-currencies. The new legal framework will support market integrity and financial stability by regulating public offers of crypto-assets while also providing measures against market manipulation and preventing criminal activities such as money laundering and terrorist financing.
All in all there was an overwhelming majority of MEPs who clearly have a desire to regulate a trendsetting sector that has thus far been relatively neglected from a regulatory standpoint. On the other end of the spectrum, the Crypto industry was thrilled with the plenary’s outcome which finally validated this new and innovative financial niche.
Whilst the approved legislation will become law 20 days after formal endorsement by the Council and publication in the EU Official Journal, what will follow is a typical 12-18 month transitional period where Subject Persons will need to put this legislation into practice. Do contact cleversoft as a your regulatory technology partner in order to understand how we can help you be compliant with these new regulations.