Debate: Markets in Crypto-assets  - Information accompanying transfers of funds and certain crypto-assets
Date: WEDNESDAY, 19 APRIL 2023
Speaker: Ernest Urtasun
Country: Belgium
Language: EN

MiCA represents an important and necessary first step to bring the crypto sector under the regulatory oversight. There will be safeguards for investor protection rules against market abuse, anti-money laundering checks on companies and crypto companies will be held liable to the clients.  One key concern was that this whole new framework is undermined by foreign companies serving EU customers from outside the EU, in breach of MiCA standards. We successfully pushed for an EU-wide blacklist of non-compliant entities supported by far reaching supervisory powers. This will add regulatory teeth to MiCA.  One contentious point was related to the climate impact of crypto mining. MiCA will require now issuers and crypto companies to disclose information on the climate footprint of the crypto they issue and trade, based on a standardised methodology. This is positive but I have to say it is only a first step until we finally manage to better control at international level certain consensus mechanisms that are extremely energy intensive and have become a threat for our climate goals.  Overall, there is more to be done. From lending and staking, decentralised finance, NFTs to the environmental impact of crypto mining, as well as on antitrust and with respect to supervision of crypto groups. The recent collapses in crypto space – FTX, SVB, Silvergate – showed the urgency of taking additional steps. MiCA today is a first step, but is not enough.  Finally, MiCA will fully apply only in the last quarter of 2024 and I would like to ask the Commission, and also the Member States, until then to analyse possible transitional measures to protect consumers and prevent abuses.  Let me now quickly move to the recast of the TFR. Today, illicit flows are moved swiftly across the world with a high chance of never being detected. Criminals thrive where there is financial secrecy and anonymity. The recast of the TFR will finally oblige crypto-asset service providers to trace every crypto-asset transfer to a verified identity in order to detect and block suspicious transactions and facilitate investigations.  Parliament has significantly strengthened the original Commission proposal. Firstly, by ensuring traceability on all crypto transfers from the first euro by eliminating the de minimis threshold of EUR 1 000. Secondly, transfers between a CASP and a self-hosted wallet are captured by the traceability rules. And thirdly, CASPs are required to apply enhanced due diligence on a risk basis to all transfers with self-hosted wallets, including verification where possible, and mandatory verification in certain cases.  I believe that with these measures, the EU will implement the most ambitious travel rule legislation in the world so far, in full compliance with international standards. Let me end by thanking my co-rapporteurs and all shadows for the excellent cooperation to ensure a swift conclusion of political negotiations. Thanks to Commissioner McGuinness as well, and her teams, for the support; to the French Presidency, also, for the openness and constructive negotiations. And let me end by thanking my team, Valeria Cusseddu and Jesús Hernández,  who are the Green advisors who I work with, without whom this would not have been possible.