European regulators are expressing concerns over the effectiveness of existing mechanisms for cryptocurrency regulation, proposing new strategies for improved oversight.
Issues with Current Regulation
According to European market authorities, the introduction of the new regulatory framework MiCA has resulted in significant disparities in its application. This raises concerns about investor protection and creates opportunities for companies to exploit more permissive jurisdictions.
Proposed Measures for Enhanced Control
Regulators are advocating several strategies: to grant the European Securities and Markets Authority (ESMA) direct oversight over major crypto-asset service providers to reduce regulatory gaps between EU countries.
Risks for Investors and the Need for Changes
Existing loopholes that allow EU intermediaries to route orders to offshore platforms not governed by MiCA pose a threat to investor protection. Regulators emphasize the necessity of mandatory independent cybersecurity reviews for acquiring or renewing MiCA licenses.
> “Cybersecurity is an urgent priority to protect investors and ensure market integrity,” a regulator emphasized.
Timely revisions to MiCA are crucial to create a safe and competitive digital asset market in Europe.
