Some provisions in the recent crypto regulatory proposal, which was approved by the European Parliament, are not supported by the European Commission. According to media reports, the executive branch in Brussels is not happy with anti-money laundering measures.
European Commission is working on a compromise proposal for EU Crypto Rules
The trilogue stage is proving difficult for Europe’s Markets in Crypto Assets ( MICA) legislation, less than two years after the European Parliament voted to approve the draft. Discussions have been ongoing with the European Commission (EC) and the Council of the EU since then.
The German crypto news portal BTC Echo received an unofficial letter indicating that the Commission disagrees with certain points in the legislation and is working on amendments. The executive body expressed concerns about specific measures that are intended to combat money laundering and financing terrorism.
These provisions are found in Article 4 MiCA. The Parliament is trying to stop the EU licensing crypto asset service providers (CASPs), that are located in non-compliant jurisdictions, “high-risk zones” or registered in countries which do not levy corporate taxes. The Commission points out that there is no similar prohibition in any other legal acts. A prohibition of this nature would also be against the rules and regulations of the World Trade Organization.
According to the EC, it is not clear why this measure should be applied to crypto providers. These platforms are also subject to EU directives on fighting money laundering and terrorist funding. The Commission insists that these directives provide sufficient protection for operators who originate from high-risk countries. This new regulation will only increase the burden placed on EU authorities.
The European Parliament also proposes to establish a register of non-compliant CASPs that will be maintained by the European Securities and Markets Authority. The Commission has expressed serious doubts about the feasibility and viability of the proposal in a letter. It believes that, if it is necessary to do so at all, it should be included in the general anti-money laundering regulations which affect all financial market participants.
The European Commission also condemned the criteria adopted for non-compliance. It claimed they were unclear. The European Commission is demanding that the European Parliament make improvements in this area and will present a compromise proposal prior to the next round on Wednesday, May 18.