Crypto Business Leaders’ Open Letter to the EU

In an effort to reduce the impact felt by the crypto industry in Europe, over forty crypto business leaders have urged the European Union to reconsider the requirement for crypto platforms, exchanges, and brokers to disclose detailed transaction information. The business leaders aim to counteract efforts to restrict decentralized financial platforms, which have been experiencing substantial growth.

A letter has been shared, illustrating the concerns of the crypto business leaders, and it was sent to the twenty-seven EU finance ministers. In the letter, they request that the finance ministers do not impose regulations beyond the guidelines established by the global Financial Action Task Force (FATF), which focuses on reducing the risks of money laundering.

This letter follows a vote by EU lawmakers that mandates crypto companies to be accountable for tracing Bitcoin and other cryptocurrencies. Crypto exchanges like Coinbase Global Inc. have opposed this move, as they are not willing to collect and store information about users who transact cryptocurrencies on their platforms. The letter is seen as a response to this vote, with forty-six crypto business leaders stressing that such proposals could harm all digital asset owners. The public disclosure of transaction details and wallet addresses would compromise privacy and security.

Along with the threat to the anonymity of crypto transactions, the EU introduced a broader framework, the Markets in Crypto-Assets (MiCA) regulation. MiCA governs service providers and issuers of digital assets within the EU market. The EU Parliament has recently approved the MiCA draft, which is now awaiting negotiation with EU member states’ heads and the executive branch. The letter by the crypto business leaders also addresses this regulation. They request that the EU exclude decentralized projects from the legal requirement of registering as a legal entity, which includes decentralized finance (DeFi) platforms that wish to remain unregistered. Additionally, they argue that specific centralized stablecoins should not fall under MiCA regulation. This plea comes amid Britain’s announcement that it will begin imposing regulations as it targets becoming a global crypto asset hub.

Backing for the Letter from Crypto Industry Leaders

Jean-Marie Mognetti, the CEO of CoinShares, organized the letter to the EU finance ministers on behalf of crypto business leaders. He emphasized that Europe offers a more restrictive environment with more complex crypto regulations compared to other regions of the world. In his view, these regulations are hindering the adoption of this rapidly growing industry and are stifling business growth in the region. Mognetti called for a balance that protects innovation in Europe, stressing that the focus should be on aligning regulations with FATF recommendations. Diana Biggs, Chief Security Officer at DeFi Technologies, also supported the letter. She was part of the team that organized the petition and expressed her desire to elevate the influence of the European crypto industry to the point that it can impact policy decisions in Brussels. Biggs also lamented the lack of strong, coordinated efforts within the European crypto sector.

What’s Next for the European Crypto Market?

Privacy is a key selling point in the crypto world, especially for crypto wallets used by NFT creators. The decentralized structure of the crypto industry, along with its focus on anonymity, has left it vulnerable to illegal activities. Moreover, crypto exchanges often lack transparency and legitimacy, fueling the push for global industry regulations. Pavel Matveev, CEO of Wirex, believes that regulation would lead to improved business practices and a better customer experience. He advocates for collaboration between lawmakers and crypto industry leaders to achieve the best outcome for all parties involved.

However, some industry figures, such as Michael Kamerman, CEO of the Scandinavian crypto broker Skilling, disagree with the proposed regulations. He shares the concerns of the crypto business leaders, believing that such proposals would violate privacy and jeopardize safety.

CryptoChipy Ltd continues to provide updates on the ongoing efforts of crypto industry leaders to oppose the EU proposals.