Despite the fact that the implementation of the recently approved Markets in Cryptocurrency Assets (MiCA) regulations is very likely be difficult, their coming into force is going to have a positive outcome for everyone in the industry, Przemyslaw Kral, the CEO of the cryptocurrency exchange Zondacrypto, has stated. Kral likewise claimed that the implementation of these regulations will force non-compliant entities or those that cannot “deliver the required standards” to leave the European Union market.
The Impact of MiCA Regulations on Cryptocurrency Industry Participants
In his written answers to questions from Bitcoin.com News, the CEO suggested that the new regulations will secure incidents such as the collapse of FTX Trading Ltd won’t be recur. Additionally, the regulations will stop human trafficking rings or criminal gangs from moving funds via Europe.
Concerning fears that the implementation of MiCA regulations will see cryptocurrency corporations leave Europe just as some have done in the United States, Kral stated much will depend on their objectives. For cryptocurrency corporations whose objective is to deliver the best service for users, the implementation of MiCA regulations is not going to affect their operations. On the other hand, cryptocurrency corporations that “prefer to avoid transparency,” MiCA regulations may force them to abandon the European market.
Similarly, in his answers sent to Bitcoin.com News via Telegram, Kral spoke of how Europe-based cryptocurrency exchanges are preparing for MiCA regulations. Below are the rest of the Zondacrypto CEO’s responses to the questions sent.
Bitcoin.com News (BCN): Your cryptocurrency exchange is one of Europe’s long-standing digital investment exchanges. Does the approval of MiCA regulation pose a new or unusual threat to Zondacrypto?
Przemyslaw Kral (PK): At Zondacrypto, we have long was known for greater regulatory clarity, so we are well-prepared for the new regulation. We have already achieved great success in cementing our positive regulatory stance with licences in plenty of European countries. In our case, we do not must make any additional preparations as we have long been adapting our activities and even going beyond the legal requirements to secure that our users feel safe.
BCN: There is no doubt the collapse of FTX Trading Ltd in late 2022 has highlighted the importance of corporate governance in the cryptocurrency space. The European Commission has stated the MiCA regulation aims to facilitate innovation and the uptake of new financial technologies whilst ensuring that investors are protected. In your view, is MiCA balanced?
PK: Despite the fact that MiCA may be hard to implement, especially for smaller start-ups, I believe the result will be positive for everyone. Regulatory clarity is good for everyone: institutional and individual investors, users, and corporations – everyone can benefit, which will in the end mean that the European market will grow. On the other hand, of course, it likewise implies that those corporations that can’t deliver the required standards or do not have the best interests of users at heart will have to leave the EU or change their business model.
BCN: What will change for the cryptocurrency customers when MiCA regulations come into force?
PK: From the point of view of customers of regulated exchanges such as Zondacrypto, the changes will not very whole lot of or noticeable, as a result exchanges already have strict KYC and AML procedures in place. Nonetheless, users of unregulated or non-compliant exchanges may encounter withdrawal issues and will likely be requested to provide additional information regarding their identity and source of funds.
BCN: What sort of market manipulations and insider dealings do you see today that MiCA seeks to deal with or solve?
PK: The past few collapse of FTX Trading Ltd is an example of the kind of dangers that can arise from inadequate regulation, and MiCA will go a long way to ensuring that a similar catastrophe doesn’t happen in the EU. MiCA will likewise secure that money moving through EU-based exchanges is not used to finance terrorism, trafficking or similar crimes. With strict procedures and heavy fines for non-compliance, rogue exchanges will no longer be allowed to profit from or ignore criminal activity on their platforms.
BCN: In the United States, critics claim that the approach taken by regulatory authorities will result in numerous cryptocurrency corporations leaving the country. Do you foresee the MICA regulation having a similar effect?
PK: It all depends on the company and its objectives. If they have the best interests of their users in mind, they will already have some procedures in place to vet users and make sure that no shady activities can happen on their watch. On the other hand, for those corporations that prefer to avoid transparency, leaving the European market could be the only viable option – and I’m sure their regulated competitors will benefit from the situation to attract more customers into the European market. Those who play fair will win, and those who prefer to resort to dodgy strategies will have to move on.
BCN: How are European cryptocurrency exchanges reacting or preparing for the new regulation?
PK: The exchanges that have previously ignored regulatory requirements will must adapt their procedures to the new legislation, including more thorough vetting processes for users. This can mean more jobs in cryptocurrency, as the exchanges will be seeking new specialists to assist them process numerous user verification procedures. And, of course, it will mean more safety and security for everyone involved in the industry.