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The European securities authority has issued a warning regarding the considerable risks linked to global firms engaging in cryptocurrency transactions outside the European Union to evade MiCA regulations.
The European Securities and Markets Authority (ESMA) released a specific document emphasizing the potential for cryptocurrencies to be utilized in offshore transactions by Multifunction Crypto-asset Intermediaries (MCI) that operate both within and beyond the EU.
MCIs consist of individual companies or groups of affiliated entities focused on a diverse array of services or products. They are generally centered around the management of a single trading platform. A notable instance of an MCI is the FTX crypto exchange ecosystem prior to its downfall.
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In the report, the ESMA articulates its primary concern regarding the potential for regulatory arbitrage by these entities. The authority is apprehensive that MCIs might attempt to lessen their exposure to the MiCA legislation by executing portions of their operations outside the EU. This could result in conflicts of interest, diminish investor protection, and create disparities in competition between platforms operating inside and outside the EU.
The ESMA cautions that certain crypto firms that are part of MCIs may be unregulated trading platforms situated outside the EU. Consequently, their level of consumer protection may not align with MiCA standards, thereby posing additional risks for investors.
The authority advised national competent authorities (NCA) to thoroughly evaluate the business models and activities of MCIs to prevent them from transitioning offshore. Specifically, regulators should vigilantly oversee the delegation of functions within MCIs to ensure compliance with regulatory obligations. In turn, the ESMA is prepared to offer its expertise and utilize its authority to foster a consistent and uniform approach to the oversight of MCIs aiming to provide services within the EU.
The MiCA legislation was enacted in the EU this year. European financial regulators have also created a standardized assessment to determine whether a specific cryptocurrency complies with regulatory standards under the MiCA legislation. However, regulators are cautioning crypto users that MiCA will not fully safeguard their interests for the next three years.
Сообщение MiCA Keeps Door Open for Offshore Transactions in Crypto появились сначала на CoinsPaid Media.
