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- 1 The European Union has been on schedule to implement MiCA by December 2024.
- 2 The body is reviewing many policies and introducing new ones for better security and transparency.
- 3 Recently, it said that the crypto company shareholders will be vetted for past conduct.
As the EU gets ready for MiCA implementations, new updates are cropping from various fronts. On Friday, the body announced something that will impact crypto company shareholders. It said that holders with more than 10% stake will be examined for previous convictions. They will be vetted under the bank-style rules proposed by EU regulators.
What Does This Mean For Crypto Company Shareholders?
The rule certainly indicates the government’s intention to keep a close eye on the firms. Especially, after the FTX scam, regulators have become more vigilant. Some distinguished C-level executives are currently in a court battle with the SEC. Along with FTX’s Sam Bankman-Fried, Binance’s Changpeng Zhao and Celsius’ Alex Mashinsky are also facing charges.
According to the Securities and Exchange Commission (SEC) of the US, they failed to comply with the rules. EU wants all the companies operating in this space to toe the line. The Markets in Crypto Assets (MiCA) regulations will be implemented in December 2024. It would mark a watershed moment as crypto will be inducted into the mainstream economy for the first time. Particularly, the scale at which it is happening is considerable.
Thus, the European regulators want to make it foolproof. With this new clause, they will ensure that only the reliable parties join the fray. Notably, the MiCA regulations will authorize companies to operate in 27 nations. However, if the entities don’t meet the set standards, then they will be barred from functioning. The new rule mandates shareholders as well as board members to get a clean chit from authorities.
If they have a history of terrorism funding or money laundering, it would affect their reputation. The ESMA and EBA said that this condition has to be met. They also said that the agencies will maintain the banking and securities law at every cost. In the past, ownership laws have prevented many from owning a major shareholding in a bank. Former Italian Prime Minister Silvio Berlusconi tried to get hold of the stocks of a bank.
The authorities prevented that on the grounds of tax fraud charges on Berlusconi. Moreover, regulators would also enact some restrictions on companies issuing stablecoins. Reportedly, they will have limited staff bonuses. As per the regulators, this move will curtail unchecked risk-taking practiced by private companies
MiCA and Its Impact on the World
On 20 April 2023, the European Parliament greenlighted MiCA unanimously. The Economic and Financial Affairs Council of the EU approved it on 16 May 2023. The draft gives better clarity on the comprehensive rules for the crypto industry. It aims to bring uniformity and transparency to the working of digital assets. Before MiCA, some European nations had already framed rules for cryptocurrencies.
With MiCA, the rulebook for crypto will be the same in every country in Europe. The induction of this holistic regulation is indeed very important. It encourages many other nations to work towards the same cause. Furthermore, it would set a precedent with all its pros and cons. For many crypto users, this regulation is a boon and for some, it’s a little limited.
Andrew is a blockchain developer who developed his interest in cryptocurrencies while pursuing his post-graduation major in blockchain development. He is a keen observer of details and shares his passion for writing, along with coding. His backend knowledge about blockchain helps him give a unique perspective to his writing skills, and a reliable craft at explaining the concepts such as blockchain programming, languages and token minting. He also frequently shares technical details and performance indicators of ICOs and IDOs.
