In anticipation of EU-wide regulation coordinating the union’s approach to digital assets, cryptocurrency exchanges have been scrambling to set up shop.
Over the past week, both Crypto.com and Coinbase secured virtual asset provider registrations with regulators in Italy, while Gemini received registration in Ireland. Meanwhile, the world’s largest cryptocurrency exchange by volume, Binance, also managed to secure registration in France, Italy and Spain over the past month.
While the registrations do not mean that the exchanges are licensed to operate as regulated financial companies in these countries, they are an important step in anticipation of sweeping rules, known as Regulation on Markets in Crypto Assets (Mica).
These rules were provisionally outlined by European Union member states and the European Parliament earlier this month. They would enable crypto services providers to offer their services across the EU with authorization from just one national authority.
Pick a state
Consequently, EU member states are also trying to get an edge before the legislation is enacted. According to Spanish MEP Ernest Urtasun “national regulators want exchanges to choose their member state.”
There is ample evidence for this argument, especially among key stakeholders in France and Italy, who have reacted enthusiastically towards Binance. “Look, we want to welcome you here,” France’s President Emmanuel Macron told Binance’s CEO, Changpeng Zhao, last year. “Please apply for a license.”
EU crypto regulation
Last month, the EU agreed on anti-money laundering (AML) rules for cryptocurrencies that would oblige firms to check customer identities regardless of transaction size. The rule serves as an expansion of the “travel rule” to cryptocurrencies, mandating crypto exchanges to collect information on both the sender and receiver of cryptocurrency transactions.
The European Council said that the move is geared towards “making it more difficult for criminals to misuse cryptocurrencies for criminal purposes” and “will ensure the traceability of crypto-asset transfers.”
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