European Commission Has Serious Doubts About Markets in Crypto Assets Draft – The European Parliament’s impending Markets in Crypto Assets (MiCA) legislation is facing opposition in the trilogue stage, less than two months after the draft was approved. Since then, talks have been ongoing with the European Union’s other two legislative bodies, the Council of the EU and the European Commission (EC).
According to an unofficial letter obtained by the German crypto news outlet BTC Echo, the Commission does not agree with some parts in the legislative texts and is planning revisions. The executive body is particularly concerned about certain measures targeted at combatting money laundering and terrorism financing.
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The Parliament aims to restrict EU licensing of crypto asset service providers (CASPs) based in non-compliant jurisdictions or “high-risk areas,” or registered in countries that do not levy corporate tax, with these measures found in Article 4 of MiCA. The Commission points out that no other legal acts have a similar prohibition. Furthermore, such a limitation would be in violation of World Trade Organization laws.
It is uncertain why such a policy should apply to crypto providers in particular, according to the EC. Other EU directives on fighting money laundering and terrorist financing apply to these platforms, which the Commission says provide adequate protection for operators from third countries operating in high-risk areas. The proposed legislation will merely add to the administrative load on EU institutions.
The European Parliament also proposes that the European Securities and Markets Authority maintain a register of non-compliant CASPs. However, the Commission’s letter indicates that it has “severe reservations” about the proposal’s practicality.
It also argues that, if such a need exists, it should be included in the general anti-money laundering legislation that apply to all financial market participants.
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The European Commission also critiques the adopted non-compliance criteria, claiming that they are vague. It is requesting amendments from the European Parliament in this area and plans to present a reasonable proposal before the next session of trilogue negotiations on May 18.