CySEC Launches MiCA Consultation, Seeks Industry Input

BySamson Ononeme

Jun 26, 2024 ,
Cyprus regulator calls for public input on MiCA implementation, while report suggests shift in fraudulent activities from crypto to payment sectors.

Key Insights

  • CySEC launches public consultation on fees and reporting requirements under EU’s MiCA, with responses due by July 17, 2024.
  • MiCA, effective from May 31, 2023, introduces unified regulatory framework for crypto-assets across EU.
  • Early impact of MiCA shows 51% decline in crypto-related fraud.

NICOSIA (MarketsXplora) – The Cyprus Securities and Exchange Commission (CySEC) has initiated a public consultation on proposed fees and reporting requirements under the European Union’s Markets in Crypto-Assets Regulation (MiCA), seeking industry input to shape the future regulatory landscape for digital assets.

The consultation, announced on Wednesday, invites stakeholders to submit their views by July 17, 2024, as Cyprus prepares to implement the pan-European framework aimed at bringing consistency and clarity to the crypto market.

MiCA, which came into effect on May 31, 2023, introduces a unified regulatory approach for crypto-assets across the EU, focusing on assets that are fungible but not classified as financial instruments. The regulation categorizes crypto-assets into three main types: asset-referenced tokens (ARTs), electronic money tokens, and other crypto-assets.

“This consultation is a crucial step in ensuring that our implementation of MiCA aligns with industry needs while maintaining robust regulatory standards,” a CySEC spokesperson told MarketsXplora.

The new framework brings several entities under CySEC’s supervision, including crypto-asset offerors, issuers of ARTs (excluding credit institutions), entities issuing asset-referenced tokens, and crypto-asset service providers.

Industry players are already adapting to the new regulatory landscape. Earlier today, Binance, the world’s largest cryptocurrency exchange by volume, announced plans to modify its operations to ensure compliance with MiCA, particularly regarding stablecoin offerings.

The European Securities and Markets Authority (ESMA) has outlined a comprehensive plan to address crypto-related risks under MiCA, with the first package of measures set to launch in July 2023. These include guidelines on authorization, governance, conflict resolution, and complaint handling procedures.

CySEC Initiates MiCA Consultation as Crypto Fraud Declines

Early indications suggest that MiCA is having a positive impact on the digital asset space. A recent report by global identity intelligence company AU10TIX revealed a 51% decline in fraudulent activities attributed to cryptocurrencies following MiCA’s implementation.

However, the same report noted a 56% increase in fraud within the payments sector, suggesting that regulatory tightening in the crypto space may be redirecting fraudulent activities to other financial sectors.

As the consultation progresses, industry experts anticipate that the feedback received will play a crucial role in shaping the practical implementation of MiCA in Cyprus and potentially influence broader EU-wide practices.

“This consultation represents a significant opportunity for the industry to contribute to the regulatory process,” said a Nicosia-based crypto legal expert, speaking on condition of anonymity. “The outcome could set important precedents for how MiCA is applied across the EU.”

Samson Ononeme

Meet Samson Ononeme, a dynamic writer, editor, and CEO of marketsxplora.com. With a passion for words and a sharp business acumen, Samson captivates readers with captivating storytelling and delivers insightful market analysis. He is a trailblazer in the finance industry, empowering individuals with knowledge and shaping the narrative of money. Get ready to be inspired by his literary prowess and entrepreneurial leadership.

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