Earlier this week, Ondrej Kovarik, an MEP and a drafter of EU’s cryptocurrency law, spoke with a popular media outlet about how the bloc’s almost-to-be-passed crypto regulations would affect the crypto market, given recent events.
The abrupt failure of FTX —- a one-time leading cryptocurrency exchange, has caught the attention of policymakers all over the globe.
Some public policy analysts from European Union asserted that the bloc’s much-awaited crypto regulation may have eased the impact. More importantly, it would have avoided the circumstances that gave rise to the meltdown.
A last review of the law is anticipated by February next year. The framework of MiCA (Markets in Crypto Assets) establishes a complete system of regulations to oversee those who provide crypto-related services like cryptocurrency exchanges. Once approved, the MiCA enables regulators between 12 and 18 months to detail how the rules must be implemented.
FTX Collapse And Global Crypto Regulation
The most recent FTX implosion will undoubtedly increase regulators’ interest in cryptocurrency. But it is a process that is underway in Europe already. The EU is concluding the ratification of the MiCA (Markets in Crypto Assets) policies.
However, the ministers of the G20 are also debating their possible regulatory policies. In the United States, for example, there is a lot of discussion among different organizations about how to handle the cryptocurrency industry.
During the interview, Kovarik said, “we got proposals from the (FSB) Financial Stability Board. Hence, I believe several measures are in place in reaction to recent events in the broader crypto market space.”
First, it’s critical to determine the locations of the businesses involved in the latest happenings or whether any potential EU regulations would affect them.
Using the instance of FTX, Kovarik said he doesn’t see how MiCA can stop or prohibit the exchange’s collapse. He added that some effects might be lessened or minimized. But the true causes of the meltdown are outside the scope of what legislation can genuinely address.
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