The European Commission disagrees with some provisions of a proposal to regulate cryptocurrencies recently approved by the European Parliament. The executive in Brussels is unhappy with some of the anti-money laundering measures, according to media reports citing unofficial correspondence.
The European Commission is working on a compromise proposal for EU cryptocurrency rules
The forthcoming European legislation on crypto-asset markets (MiCA) is facing problems at the trilogue stage, less than two months after the European Parliament voted on the draft. Since then, discussions have been ongoing with two other participants in the European Union’s legislative process, the EU Council and the European Commission (EC).
An unofficial letter seen by German cryptocurrency news portal BTC Echo shows that the Commission disagrees with some points in the texts approved by lawmakers and is preparing amendments. In particular, the executive branch has concerns about some of the anti-money laundering and counterterrorist financing measures.
With these provisions, contained in Article 4 of MiCA, Parliament wants to prevent the EU from licensing crypto-asset service providers (CASPs) that are based in non-compliant jurisdictions, or in “high-risk areas,” or registered in countries that do not collect corporate tax. There is no such prohibition in other legislation, the Commission notes. Moreover, such a prohibition would violate World Trade Organization rules.
The EC clarifies that it is unclear why such a measure should apply specifically to cryptoproviders. These platforms are subject to other EU anti-money laundering and counter-terrorist financing directives, which, according to the Commission, offer sufficiently strong protection in the case of operators originating from third countries in high-risk areas. The new regulation will only increase the burden on EU authorities.
The European Parliament also proposes the creation of a register of non-compliant CASPs to be maintained by the European Securities and Markets Authority (ESMA). However, the Commission’s letter states that it has “serious doubts” about the feasibility of this proposal. It also believes that if at all necessary, it should be part of the general anti-money laundering rules that affect all financial market participants.
The European Commission also criticizes the adopted non-compliance criteria, saying they are unclear. It is demanding improvements from the European Parliament in this regard and intends to put forward a compromise proposal before the next round of Trilogue negotiations, scheduled for Wednesday, May 18.
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