Crypto firms are stepping up their efforts to influence European lawmakers regarding the design of the cryptocurrency regulatory framework. According to a letter seen by Reuters, more than 40 crypto leaders have asked the European Union and various EU finance ministers to ensure that regulation does not go beyond the rules already in place. within the framework of the Global Financial Action Task Force (FATF), which establishes principles for the fight against money laundering.
Unlike in the United States, where crypto companies have created several associations in Washington DC to lobby US lawmakers, in Europe the crypto community is not yet as well organized. “There have not been sufficiently strong or coordinated efforts in our industry in Europe,” said Diana Biggs, chief security officer at DeFi Technologies, which organized the letter.
Last week, the crypto community gathered in Paris for a two-day conference to discuss the present and the future of the industry. The letter seen by Reuters is dated April 13, the same day the conference took place.
The European Union is ahead of other jurisdictions like the United States or the United Kingdom when it comes to crypto regulations. In March, the European Parliament approved the draft Crypto Asset Markets Regulation (MiCA) which regulates issuers and providers of crypto assets in Europe. This regulation has not yet been finalized and may still be subject to modifications during the interinstitutional negotiations with the Member States.
In the letter, the crypto firms asked the EU to exclude decentralized projects from registration requirements as legal entities. He also said that some decentralized stablecoins should not be subject to MiCA regulations. The current draft regulations require stablecoin issuers to register, publish white papers, obtain authorizations and, in certain cases, where the stablecoin is of significant importance, to be supervised by the European Banking Authority. According to some experts interviewed by PYMNTS, the proposed legislation discourages the issuance of stablecoins in euros.
Read more: EU rules on crypto assets make euro stablecoins unprofitable
But the second rule that has raised even more concerns among major exchanges is the “travel rule”. EU lawmakers passed a proposed “regulation on information accompanying the transfer of funds and certain crypto assets” on March 31 that would increase requirements for the information providers of crypto assets will need to collect and share. for each transaction. Under the new rules, crypto exchanges would have to record and obtain data for every customer in every crypto transaction, with no “de minimis” limit as the original draft called for (a €1,000 threshold). Crypto firms claimed that this would reduce the privacy and security of holders.
“If passed, this review would trigger an entire surveillance regime on exchanges like Coinbase, stifle innovation and undermine the self-hosted wallets individuals use to securely protect their digital assets,” said Paul Grewal, Chief Legal Officer of Coinbase.
Read more: European lawmakers to vote on tougher requirements for crypto transactions
Although some of the new rules have already won the approval of the European Parliament committee, there is still time for crypto companies to influence lawmakers. First of all, during interinstitutional negotiations, it is possible, and not uncommon, to make some modifications to the text. Second, the crypto regulation, MiCA, may require secondary legislation to clarify some of its provisions. And third, there are certain areas in the crypto space like non-fungible tokens (NFTs) and most purely decentralized products that fall outside the scope of regulation and could be subject to new regulatory instruments at the ‘coming.
Read more: European crypto regulations may need clarification from day one