Officials tell European Parliament committee that FTX shows that MiCA should be passed quickly

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The committee listened to financial officials as they assessed the impact of FTX’s European collapse and suggested a path forward. News The European Parliament Economic and Monetary Affairs Committee held a hearing about “FTX cryptocurrency exchange crash and implications for EU” Nov. 30, 2018. Three European monetary officials spoke out about FTX, crypto regulation, and blockchain technology in a preliminary assessment of the events. Steffen Kern, head of the European Securities and Markets Authority’s Risk Analysis & Economics Department, told the committee that ESMA has not “supervised nor regulated FTX” and does not have any “information about the company beyond what is publicly available.” The ESMA doesn’t see any significant risks to the wider financial sector from the collapse FTX, given the small market share of crypto and the connections between traditional finance and crypto, and that ESMA has no information on the company beyond what is publicly available. Kern concluded that Markets in Crypto-Assets Regulations (MiCA), legislation which will be in force in 2024, “is addressing the right issues to provide vital protections for investors as well as important rules for market participants through a single EU regime.” #FTX? What happened? The #FTX collapse is likely cause for serious concern to retail investors. The drop in value, #CryptoAssets risk and huge price volatility as well as aggressive marketing are among the implications for investors.#ESMA statement -> https://t.co/KcEAWGIa0M pic.twitter.com/z1QLhcm0bw– ESMA – EU Securities Markets Regulator (@ESMAComms) November 30, 2022
Kern stated that FTX (EU), Ltd., which is based in Cyrpus, had been granted a Markets in Financial Instruments Directive license (MiFID), despite the fact that it was not intended to cover cryptocurrency. The license was suspended on Nov. 9. […] The failure of blockchain technology is not the fault of one person, but the failures and hubrise of another. He said, “I have two demands. First, MiCA must be passed as fast as possible. […] It would be great if many states outside of the European Union followed the MiCA example. A global MiCA is the best solution.” Alexandra Jourschroeder, deputy director general of the EU Financial Services, Financial Stability and Capital Markets Union, told the committee that “Under the MiCA regime, none companies providing cryptoassets to the EU would have been permitted to be organized, perhaps it’s more appropriate to say disorganized, as FTX reportedly was.” Christine Lagrande, president of the European Central Bank, spoke to the committee Nov. 28. She cited the FTX scandal as an example of the need to pass additional “MiCA II” legislation.