Markets in Crypto-assets (MiCa) - Information accompanying transfers of funds and certain crypto-assets (recast) (debate)
Speaker: Assita KANKO (Belgium, European Conservatives and Reformists Group / Nieuw-Vlaamse Alliantie)
Date: 2023-04-19

  Assita Kanko,  rapporteur. – Madam President, dear Commissioner and dear colleagues, the last few years have been quite a wild ride in the crypto world. Sometimes – and my colleagues would confirm that as well – it felt like a wild ride also here in this Parliament when we are negotiating the Transfer of Funds Regulation.
We started work on this file just after the total crypto market cap hit its third trillion. Trading was feverish, lobbying was feverish, and many people wanted to make sure that we do not harm this growth sector, which was also never our intention.
Things look quite different right now. At one point, cryptos collectively lost almost two-thirds of their market value. Although this year there has been some recovery, the sector is reeling from high-profile scandals and bankruptcies. Some very normal people that could be your neighbours have lost a lot. A lot more people have come around to the idea now that crypto—assets need normal regulations. That is what we have been working on in Parliament and Council, together with the Commission. I am firmly convinced that the package we are now debating today is a good package. MiCA and TFR together will make holding and trading crypto—assets safer for ordinary people and more difficult for criminals, terrorists and for sanction-evaders.
Let me highlight a few points: first of all, our new European legislation does not say that crypto—assets are bad, or that they are good. It does not say that holders and traders of crypto—assets are bad or good. This legislation simply seeks to regulate a sector that is still quite new and dynamic, but it takes a neutral approach to the merits of the sector.
Secondly, the rules that we agreed upon between Parliament and Council are not revolutionary. I would even say that there are a lot less revolutionary than some people believe crypto—assets to be. Ninety-nine per cent of our work has been to translate rules that have already existed for many years for the traditional banking sector to the crypto world.
We have translated the existing travel rule from traditional finance to crypto. We have translated existing provisions on fighting money laundering and terrorist financing from traditional finance to crypto. Colleague Berger with his file created rules on transparency and disclosure, on consumer protection and the prevention of market abuse. All this stuff is standard as every entrepreneur and every EU country knows.
Let me mention two specific issues from my own file. First of all, the threshold for application of the travel rule, or rather the absence of a threshold. It was the Slovenian Council Presidency that first removed the EUR 1 000 threshold from the Commission proposal. In Parliament, we follow the Member States. I am convinced we are doing the right thing here.
Colleagues, a EUR 1 000 threshold is really quite meaningless in the crypto world. There is high price volatility. Smurfing and opening or closing accounts is so easy. Just like banks, crypto-asset service providers would anyway need to check linked transactions, so even with a threshold in place, small amounts cannot be transferred without bureaucracy. Most importantly, it’s often in the small amounts that crime is hidden. We have seen evidence of fundraisers from terrorists with amounts of around EUR 100. We have seen evidence of payments on child pornography sites with amounts around EUR 10 or EUR 20. If we would not include the small transfers, we will not be doing enough.
Another contentious issue has been the partial inclusion of unhosted wallets. Again, the Member States made the first move in the general approach. The point is the following: we already agree that crypto—asset service providers, the banks and trading houses of crypto need regulation. We also concluded that peer-to-peer transfers, the decentralised part of the crypto world, should stay out of the scope, even if I understand that my S&D colleague Paul Tang disagrees.
But what about the interaction between crypto wallets hosted by CASPs and the unregulated private wallets? In order to prevent a massive loophole, we decided to apply the travel rule to those interactions as well. This is not fundamentally different from identifying yourself when making cash deposits or withdrawals from your bank account. Will this create a dual system and push crypto holders and traders into the unregulated world? I don’t think so. The verification burden on CASPs is very limited. We are not going to be as strict as some other countries are already today.
Colleagues, there is more to say, but I think my time for now is up and I’m looking forward to our debate. I will be happy to get back to you at the end after hearing your observations. And I also extend my thanks to my co-rapporteur Urtasun, who is amazing, to all the shadows and to my political group advisor, Jannes De Jong, thank you very much. And the collaboration with Valeria.