Cryptocurrency investors in Europe are not yet protected by EU crypto asset market rules, and it will take some time for protections to take effect.
European securities regulator the European Securities and Markets Authority (ESMA) released a statement on October 17 regarding the transition to European cryptocurrency regulations, known as Markets in Crypto-Assets (MiCA).
european securities authority emphasize Cryptocurrency investor protection based on MiCA will not come into effect until at least December 2024, meaning investors must be prepared to lose any money they plan to invest in cryptocurrencies. The authorities added:
“During this period, crypto-asset holders and clients of crypto-asset service providers will not benefit from any EU-level regulatory and supervisory safeguards (…) such as filing a formal complaint with their NCA (national competent authority) capabilities targeted at cryptoasset service providers.”
Even after December 2024, there is no guarantee that investors will be fully protected by MiCA before 2026. After MiCA applies to crypto asset service providers at the end of 2024, member states may still choose to grant crypto service providers an additional 18-month “transition period” to allow them to operate without a license, also known as ” grandfather clause”.
“This means that crypto-asset holders and clients of crypto-asset service providers may not benefit from the full rights and protections afforded them by MiCA until 1 July 2026,” ESMA wrote. Under local law, most NCAs Limited authority to oversee transitional beneficiaries.
ESMA added: “In most cases, these powers are limited to those under existing anti-money laundering regimes, which are far less comprehensive than MiCA.”
The authority stressed that retail investors must be aware that even if MiCA is implemented, there will be no “safe” crypto assets, stating:
“ESMA reminds crypto asset holders and clients of crypto asset service providers that MiCA does not address all the various risks associated with these products. Many crypto assets are highly speculative in nature.”
ESMA’s latest warning comes shortly after the regulator published its second consultation paper on MiCA on 5 October. implement The regulation will be implemented in June 2023.
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During the implementation phase of MiCA, ESMA and other relevant agencies are responsible for consulting the public on a series of technical standards, which are expected to be released sequentially in three packages.
formal introduce In 2020, MiCA aims to develop legislation to regulate crypto-assets in Europe by amending existing laws, specifically Directive 2019/1937. Groundwork for MiCA was launched in 2018 due to growing public interest in investing in cryptocurrencies.
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