It’s been a tough year in the US for crypto regulation, but things are looking brighter in Europe.
On Thursday, lawmakers in the EU voted in favour of Markets in Crypto-Assets (MiCA), a world-first comprehensive cryptocurrency legal framework.
Industry response to the news has been overwhelming positive, with the biggest bosses in crypto publicly applauding the move.
Binance founder and CEO Changpeng Zhao (CZ) praised the EU for “introducing tailored regulations for crypto to protect users and support innovation.” Cautious in his celebration, CZ added that “the fine details will matter”, but the overall framework is a “pragmatic solution to the challenges we collectively face”.
CZ said that Binance is ready to make adjustments to be in a position of full compliance.
It’s unclear whether compliance in the EU will have any impact on Binance’s frosty relationship with UK regulators. In March, Binance announced it will suspend deposits and withdrawals of GBP in May 2023 after Skrill Ltd ceased its operational relationship with the exchange in light of regulatory difficulties.
Coinbase CEO Brian Armstrong also welcomed the result of the MiCA vote, retweeting a quote by the former SEC Chair Jay Clayton stating that “Europe is trying to figure out how to bring crypto into the financial system, whereas the US policy is on keeping it out of the system”.
It’s not the first time Armstong has been critical of the US’s conservative approach to crypto regulation. Last week, he told the former UK Chancellor of the Exchequer George Osborne that Coinbase would consider moving to the UK if regulatory clarity in the US doesn’t improve.
He said: “The U.K. is our second-largest market in terms of revenue. We’re founded in the US, and I think the US has the potential to be an important market in crypto – but right now, we’re not seeing the regulatory clarity we need.”
Gemini CEO Tyler Winklevoss also chimed in on the praise, drawing a similar somber comparison to the lack of fair regulation in the US.
He tweeted: “While US regulators have been busy infighting and refusing to provide the most basic of clarity for the crypto industry, the European Union just approved the MiCA regulation, which provides a comprehensive regulatory framework for crypto in Europe. It’s sad to see the US being left behind on such an important technology and its promise.”
Binance, Coinbase and Gemini have all faced difficulties with US regulators over the past year despite a willingness comply.
The SEC itself has since become divided over the matter. On April 14, SEC Commissioner Hester M. Peirce issued a strong dissent against the Commission’s view that DeFi systems are ‘already’ exchanges, pointing out that many crypto firms have tried to register with the SEC but have been unable to do so due to lack of clarity.
The Commissioner questioned whether compliance in the US is even possible in the current climate.
She said: “The Commission does seem to anticipate that its interpretation will drive decentralized protocols toward centralization, extinction, or expatriation. It blithely acknowledges at one point that those involved in these systems “may instead choose to operate outside the U.S. or exit the market.”
MiCA will be enacted in 2024. The vote was passed by a resounding 517-38 majority, with 18 abstentions.
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