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The EU should adopt additional rules for markets of crypto.

 EU policymakers have cast doubt on whether the bloc’s incoming cryptocurrency regulations are robust enough to prevent a repeat of the collapse of FTX, whose bankruptcy has sent shockwaves through the digital assets industry.

At the European parliament’s Economic and Monetary Affairs Committee yesterday, MEPs questioned if the EU’s landmark crypto framework Markets in Crypto Assets, or Mica, which comes into force in 2024, could stop an FTXequivalent collapse.

«I have serious doubts that Mica would have prevented what happened . . . many of the problems are well beyond the scope of,» said Spanish MEP Ernest Urtasun. The fallout of the once-marquee crypto trading house has also caused a spillover into Cyprus.

FTX’s European footprint left by the Cypriot subsidiary, which has now had its licence suspended, has angered lawmakers who fear national authorities may not be up to regulating the troubled industry.

Markus Ferber, a German MEP, said it was «concerning that FTX managed to obtain an investment firm licence in Cyprus. If even remotely behaved like its parent company, this raises major questions concerning the quality of financial services supervision in Cyprus».

The hearing comes as European Central Bank officials said cryptocurrency bitcoin was unsuitable both as a payment method and investment vehicle, in an unusually forceful rejection of the digital currency.

The recent stabilisation of bitcoin’s value at about $20,000 — down from its 2021 peak of about $69,000 — was an «artificially induced last gasp before the road to irrelevance», Ulrich Bindseil and Jürgen Schaaf wrote in a blog post yesterday, rejecting claims the digital currency would rebound.

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Comments

  1. Anonymous1 December 2022 at 14:16

    FTX will happen all over again. It's just a matter of time. Crypto regulations and laws are not there yet and will take some time before they are sorted out.

    ReplyDelete
    Replies
    1. DJ1 December 2022 at 14:39

      The more we find out about the behind the scenes of FTX the more I think we're in for one heck of a ride with crypto. So many people will lose money in the upcoming years because companies like FTX have seen how easy it is to scam people. You don't need much and policymakers are pretty much powerless now.

      Delete
  2. Alexander1 December 2022 at 16:31

    Cyprus has long been the heaven for such shady companies. If the EU doesn't do something soon, things will only get worse there.

    ReplyDelete
  3. William M.1 December 2022 at 17:17

    I don't agree that Bitcoin will become irrelevant. Quite the opposite. The crypto market is still at its starting stages and many more things will happen soon with many new coins popping up. Will we see the next Bitcoin? I think so.

    ReplyDelete

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