Despiteย theย factย that the implementation of the recently approved Markets in Cryptocurrency Assets (MiCA) regulations isย veryย 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 claimedย that the implementation of these regulations will force non-compliant entities or those that cannot โdeliver the required standardsโ 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 FTXย Tradingย Ltd wonโt 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 โprefer to avoid transparency,โ 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 CEOโs responses to the questions sent.
Bitcoin.com News (BCN): Your cryptocurrency exchange is one of Europeโs 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 wasย 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 plentyย of European countries. In our case, we doย 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: Thereย is no doubt the collapse of FTXย Tradingย Ltd in late 2022 has highlighted the importance of corporate governance in the cryptocurrency space. The European Commission has stated the MiCA regulation aims toย facilitate innovation and the uptake of new financial technologies whilst ensuring that investors are protected. In your view, is MiCA balanced?
PK: Despiteย theย factย that MiCA may beย hardย 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 โ everyone can benefit, which will inย theย end mean that the European market will grow. Onย theย otherย hand, ofย course, it likewise impliesย that those corporations that canโt deliver the required standards or doย 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 willย not very wholeย lotย of or noticeable, asย aย 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: Theย pastย few collapse of FTXย Tradingย 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 doesnโt happen in the EU. MiCA will likewise secure that money moving through EU-based exchanges is not used toย 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 claimย that the approach taken by regulatoryย 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. Onย theย otherย hand, for those corporations that prefer to avoid transparency, leaving the European market couldย be the only viable option โ and Iโm sure their regulated competitors will benefitย 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 toย assist them process numerous user verification procedures. And, ofย course, it will mean more safety and security for everyone involved in the industry.
