EU-Wide Regulation Encourages Crypto Exchanges to Set Up

In anticipation of EU-wide regulation coordinating the Union’s approach to digital assets, cryptocurrency exchanges have rushed to set up shop.

Over the past week, Crypto.com and Coinbase have obtained virtual asset provider registrations from regulators in Italy, while Gemini has received registration in Ireland. Meanwhile, the world’s largest cryptocurrency exchange by volume, Binance, also managed to secure registration in France, Italy and Spain over the past month.

Although the registrations do not mean that the exchanges are allowed to operate as regulated financial firms in these countries, they are an important step in anticipation of sweeping rules, known as regulations in the crypto asset markets (Mica). .

These rules were tentatively set by European Union member states and the European Parliament earlier this month. They would allow crypto service providers to offer their services across the EU with the authorization of a single national authority.

Choose a state

Therefore, EU member states are also trying to gain an advantage before the legislation is enacted. According to Spanish MEP Ernest Urtasun, “national regulators want stock exchanges to choose their member state”.

There is plenty of evidence for this argument, especially among major stakeholders in France and Italy, who reacted enthusiastically towards Binance. “Listen, we want to welcome you here,” French President Emmanuel Macron told Binance CEO Changpeng Zhao last year. “Please request a license.”

EU crypto regulations

Last month, the EU agreed anti-money laundering (AML) rules for cryptocurrencies that would require companies to verify customer identities regardless of transaction size. The rule serves as an extension of the “travel rule” to cryptocurrencies, requiring crypto exchanges to collect information about both the sender and receiver of cryptocurrency transactions.

The European Council said the move aims to “make it more difficult for criminals to misuse cryptocurrencies for criminal purposes” and “will ensure the traceability of crypto-asset transfers.”

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Daniel C. Williams