EU's MiCA plan will penalize cryptocurrency influencers

    TheMorningCrypto Desk
    TheMorningCrypto Desk
    Published on November 3, 2022 9:22 PM

    Updated on January 26, 2023 10:42 AM

    Following a few more steps, a component of the European Union's crypto regulation bill that could have an effect on numerous crypto influencers will become law
    EU's MiCA plan will penalize cryptocurrency influencers

    The Markets in Crypto Assets bill, commonly known as the MiCA bill, was already completed in September of this year and has since received first-round legislative approval with a vote of 28 to 1. 

    The legislation will penalize cryptocurrency influencers who profit from their influence by commenting on social media sites without disclosing this to the authorities. The legislation of the law is still ongoing.

    The bill's passing has been closely followed by Patrick Hansen, director of EU strategy and policy at stablecoin issuer Circle. On November 1, he raised attention to a clause that dealt with public statements made without the appropriate disclosure.

    "Attention, crypto influencers: Once MiCA is in effect, discussing crypto assets in (social) media without disclosing your motivations and making money from the results will be regarded as market manipulation in the EU."

    What digital assets fall within the MiCA bill's scope?

    The bill has been regulating crypto assets under three different categories. These different categories will be based on the value of the tokens of that cryptocurrency concerning the other assets.

    The law covers all of the critical crypto advice and market roadmaps. Stablecoins, NFTs, crypto mining assets, crypto asset service providers (CASPs), and many other digital assets are included in this category.

    The section is a component of the MiCA bill's policies intended to "prevent insider dealing, the unauthorized publication of inside information, and market manipulation relating to crypto-assets, in order to safeguard the integrity of crypto-asset markets."

    The passage has attracted some interest from the cryptocurrency community, and a post about it in the cryptocurrency subreddit of Reddit shows that the community is in favor. The thread's leading remark reads as follows:

    "Promoting specific projects while avoiding accountability for the harm they cause to individuals. It's high time those influencers get their just rewards."

    Even though MiCA won't be utterly applicable until 2024, it is highly likely to pass, with Hansen even describing it as a "sole formality" when the text was finalized on October 5:

    "7/ Subsequently, the final texts will be voted on once more in the ECON committee of the Parliament, the Council, and ultimately in the Parliament's plenary, which is a formality at this point.

    According to comparable financial legislation, this can occur between December 22 and January 23."

    The Potential Impact of the MiCA Bill on the Future of Decentralization

    The EU says that MiCA will promote adoption through regulation, yet the plan restricts more dependable digital assets like stablecoins. Regarding foreign currencies, Mathieu Hardy of the asset management app OSOM says there is practically a tech-based bias.

    "The amount of tokenized [U.S. dollars] that can be exchanged for cryptocurrency assets is capped, but there are no limits on the amount of non-tokenized USD that can be exchanged for either cryptocurrency or traditional assets. While providing minimal protection to monetary sovereignty, this extensive discrimination of USD e-money tokens is quite likely to complicate the operations of CASPs (Crypto Asset Service Providers)".

    READ ALSO: The MiCA crypto framework was overwhelmingly accepted by a European Parliament committee

    Although MiCA claims to prioritize customers, its main focus is on fighting money laundering. Having a framework like MiCA is fantastic in protecting consumers, but in the long run, MiCA is hurting consumers since it makes it so expensive for crypto companies to operate in Europe that only existing ones can.

    Genuinely decentralized companies will survive, but partially decentralized organizations will suffer.