EU receives letter from 46 crypto firms outlining legislation concerns

What

European Union (EU) finance ministers have received a letter signed by 46 crypto firms calling for a review of draft crypto legislation that the signatories claim would harm the $2.1 trillion industry

Why

The letter, delivered on 13th April, comes following proposed legislation from the EU to require crypto firms to disclose all crypto transactions that take place on their platforms. This could put the EU at odds with other countries and make it a less competitive place for crypto startups, the letter warns

What next

MiCA, the name for the wider legislation framework, was recently passed through the European Parliament and will next be debated by the EU’s member states to shape the final bill

The story

The signatories are hopeful they can influence EU lawmakers to take out what they see as restrictive rules on the industry, such as requiring transaction information to be shared with regulators — including the identity of senders and receivers. This, the letter argues, would “put every digital asset owner at risk”, citing concerns around privacy and safety for users.

The EU says that MiCA is designed to bring the crypto industry in line with other AML (anti-money laundering) policies to crack down on financial crime.  Although some industry insiders agreed on the need for the EU to create a framework, they called for a more collaborative approach with the crypto industry. Diana Biggs, chief security officer at DeFi technologies, said that there hadn’t been “strong enough or coordinated efforts across our industry in Europe.”

Another request in the letter was to remove the need for DeFi platforms to be registered as legal entities, reflecting a clash between the drive to create decentralised international platforms from the industry with the demands from lawmakers for greater localised accountability. A similar request was also made for some stablecoins to be exempt from MiCa due to their importance for liquidity for cryptocurrencies.

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