Drive the Crypto Policy Conversation Forward
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- EU watchdogs on Friday issued consultations on a range of issues set to be regulated by the bloc’s landmark new crypto law, MiCA.
- The proposals cover curbs on ownership, governance and bonuses for crypto companies and their staff.
Crypto company shareholders with a more than 10% stake will be vetted for previous convictions or sanctions under bank-style rules proposed by EU regulators Friday.
The rules come as high-profile crypto industry executives including FTX’s Sam Bankman-Fried, Celsius’ Alex Mashinsky and Binance’s Changpeng “CZ” Zhao fight U.S. charges that they have misled or defrauded customers, or failed to comply with federal securities laws.
New European Union laws known as the Markets in Crypto Assets regulation, MiCA, due to take effect in December 2024, require prospective crypto license holders to show owners and executives have a good reputation. MiCA authorizations – which will allow crypto companies to operate across the 27-nation bloc – can be withdrawn if executives don’t meet the grade, added the consultation, which is open for comment until January.
Shareholders and board members of crypto asset service providers “must not have been convicted of offenses relating to money laundering or terrorist financing or of any other offenses that would affect their good repute,” a condition that has to be “maintained at all times,” said the EBA and ESMA, the EU rulemaking agencies responsible for banking and securities markets law.
In other parts of the financial sector, ownership curbs have been used to try and prevent former Italian Prime Minister Silvio Berlusconi from owning a major shareholding in a bank. Berlusconi, who died earlier this year, had previously been convicted of tax fraud.
Under the planned measures, companies issuing stablecoins – cryptocurrency tied to the value of other assets such as fiat – would also face limits on staff bonuses as regulators seek to imitate controversial banking-sector measures designed to curb excessive risk-taking.
Edited by Sheldon Reback.
