EU Securities Watchdog Likekly to Tigethen Scrutiny on Crypto
The European Union’s securities regulator is set to tighten scrutiny of crypto transactions after the EU adopted breakthrough rules to regulate the embattled sector, according to a public tender document. The European Securities and Markets Authority (ESMA), the bloc’s watchdog, released a public procurement request Tuesday to crypto trades data providers.
EU Securities Regulator Seeks Transaction Data for Spot Trades and Derivatives
The European Securities and Markets Authority (ESMA), an independent EU securities regulator, published a procurement request Tuesday to providers of trading data on crypto transactions, including spot trades and derivatives. The move comes as the watchdog begins preparations for tighter scrutiny of the cryptocurrencies after the EU agreed on novel rules to regulate the troubled sector.
Under the terms of the new regulations, crypto asset businesses will be licensed by national regulators in EU member countries, while ESMA is set to investigate major players. The procurement request does not apply to transactions powered by blockchain or distributed ledger technology such as Bitcoin.
“The coverage should encompass all major exchanges and crypto assets so that it provides a fair representation of the crypto market landscape.”ESMA said in its notice.
Regulators generally analyze transaction data to detect market frauds and abuses and identify risky positions that could affect well-ordered markets. The maximum contract value is 100,000 euros, while the maximum duration of the framework contract is set at 4 years.
“Data should be available with daily frequency and include access to order books where to see spreads and liquidity across exchanges and trading pairs (in fiat and crypto).”it said.
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Efforts to Regulate the Crypto Industry Continue
ESMA’s procurement request comes roughly a month after the EU agreed on landmark rules to regulate the “crypto wild west” – a term that refers to unbacked crypto assets, stablecoins, as well as crypto wallets and trading venues. The bloc adopted new rules after a challenging crypto market drawdown this year, which has resulted in several firms going bankrupt.
The market’s collapse has mainly occurred due to record-high inflation and the crash of the algorithmic stablecoin TerraUSD and LUNA earlier this year, but it has also emphasized the need for tighter scrutiny of the sector worldwide. The proposal, known as markets in crypto-assets (MiCA), is expected to “put an end to the crypto wild west and confirms the EU’s role as a standard-setter for digital topics,” said Bruno Le Maire, French Minister for the Economy, Finance and Industrial and Digital Sovereignty.
Last month, the global financial stability watchdog Financial Stability Board (FSB) also said it plans to submit a proposal for crypto assets regulations later this year following the market slump. This was the first time the FSB, which consists of G20 regulators and central banks, took specific action to regulate the crypto market.
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