New strict crypto regulations in the EU crypto industry are seen as retrogressive and might sabotage European crypto firms and innovation – here’s why.
Compliance is what regulators emphasize. They want crypto services to operate as if they are centralized solutions.
Think of Visa being equated to Bitcoin or Litecoin. Unlike Visa, the only problem is that Bitcoin depends on a decentralized network.
Crypto transactions are censorship-resistant and, most importantly, global.
In the early days of crypto, regulators accused Bitcoin of enabling money laundering and even funding terrorism.
The good news is that this lie was debunked. Unlike fiat, all crypto transactions are public and, to some degree, private.
The lack of privacy, say in Uniswap transfers, is good and bad–which is beneficial for authorities. Nonetheless, regulators insist that crypto firms operating in their respective jurisdictions comply with existing rules.
Pavel Durov Of Telegram Arrested: A Crypto Concern?
Amid this, events in the European Union are concerning. Last weekend, Pavel Durov, the CEO of Telegram, a privacy-centric messaging app closely related to TON, was arrested.
He broke no law, but French authorities claimed his messaging app was problematic. They allege that criminals have taken advantage of Telegram to break laws and even finance terrorism.
France is one of the biggest economies in the European Union (EU). Their decision to arrest and detain Durov was widely criticized as a deliberate attempt to suppress the right to expression and crack down on the much-deserved privacy.
Some even saw it as one of the risks crypto entrepreneurs face in the EU.
Telegram’s association with a crypto project also means France’s action was another attempt by an EU member to stifle crypto and its innovation.
More rules, more surveillance, more data-gathering, more fines
The EU and these sick bureaucrats are once again triumphing in making rules to destroy crypto. Same as with ai, the EU does not even have an ai-sector yet, and already crushing rules are in place. Full surveillance… pic.twitter.com/qkZGCgb9BT
— Tim (@Tim_4444) August 28, 2024
Though the EU is seen as progressive, the region has been implementing fresh laws to govern the crypto industry.
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Are These Laws Sabotaging Crypto Innovation In The EU?
For example, introducing the Digital Services Act in 2023 sought to impose even more obligations for crypto and online platforms.
Additionally, even more laws are in the pipeline revolving around AI and crypto. These new regulations are seen as retrogressive and would significantly impact crypto innovation and further restrict the freedom of expression.
Already, the impact of the Markets in Crypto-Assets (MiCA) regulation (since June 2024) for EU companies is being felt.
Though MiCA aims to clarify, most think this framework imposes more requirements for crypto firms and is burdensome.
Furthermore, the Anti-Money Laundering Regulation (AMLR) imposes even more strict restrictions on crypto businesses. They must not only identify their clients but also track their activities.
The combination of all these strict rules in the EU means crypto firms have to incur even more costs to comply.
Meanwhile, EU regulators will have even more control over the digital landscape, including crypto.
While the EU remains a vital cog in the global economy, crypto firms within this region are disadvantaged.
Those who operate in more lax territories like Malta, Singapore, and Dubai have a head start due to the reduced exposure to tight crypto regulations.
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Disclaimer: Crypto is a high-risk asset class. This article is provided for informational purposes and does not constitute investment advice. You could lose all of your capital.
