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The European Union Parliament passed a positive verdict for the Market in Crypto assets (MiCA) regulatory framework, approving its official implementation in early 2025.
MiCA’s much-needed approval comes after the prominent collapses of big crypto players including FTX, Celsius, and Voyager. The framework ensures the protection of investors from further project failures and has been overwhelmingly accepted in the EU parliament with a vote of 517 for and only 38 against.
Mairead McGuinness, the European Commissioner for Financial Stability, Financial Services, and the Capital Markets Union gladly welcomed MiCA as the world’s first comprehensive crypto rulebook to safeguard investors and create a sustainable market.
MiCA: What It Is And Why It Matters
MiCA, or Market in Cryptoassets, is a new crypto regulation framework which requires crypto asset services providers (CASPs) to gain licenses from legal authorities before entering the EU market.
It primarily covers crypto assets that are not currently governed by the existing EU laws. For instance, electronic money tokens or asset-referenced tokens fall under the scope of MiCA.
The MiCA will be progressively implemented over the next two years with regulation of stablecoins taking place in July 2024. This will require the crypto providers to have trading caps on non-euro-denominated tokens not backed by fiat currency, and also maintain fund reserves. The broader MiCA rules governing these crypto platforms will come into effect by early 2025.
The European Banking Authority and the European Securities and Markets Authority will be responsible for ensuring compliance by the crypto platforms. They will also look into certain MiCA guidelines before its final implementation.
The rules have been developed for three years as an alternative to the US approach of regulating through enforcement which has been making companies like Bittrex move out of the state.
However, the EU’s decision is being considered to bring a new era in the development of cryptocurrency regulations. For instance, investors can opt for MiCA-approved crypto platforms over others to ensure financial security. This will also attract more crypto service providers to build in the EU market.
The approval of MiCA as the first regulatory guideline is expected to raise the bar of crypto legislation worldwide. It will also encourage crypto adoption as more consumers can invest in crypto platforms approved by legal authorities.
The “travel rule” used in traditional finance will now also apply to crypto where the exchanges have to provide the sender and recipient information for transactions to authorities. This will also be applicable for transfers above €1,000 from self-hosted wallets.
Taking about the MiCA implementation, Binance CEO Changpeng Zhao earlier tweeted,
“The European Parliament voted for MiCA to be implemented.
This means one of the world’s largest markets is introducing tailored regulations for crypto to protect users and support innovation.
The fine details will matter, but overall we think this is a pragmatic solution to the challenges we collectively face. There are now clear rules of the game for crypto exchanges to operate in the EU. We’re ready to make adjustments to our business over the next 12-18 months to be in a position of full compliance.”
As of now, crypto lending, NFTs and DeFi are not included in the legislation which still keeps scope for improvement in the current set of laws.
But even then, MiCA comes as the first step towards a larger global crypto adoption and regulation fostering innovation in this space.
1. What is the MiCA rule in crypto?
MiCA, or Market in Cryptoassets, is a new crypto regulation framework which requires crypto asset services providers (CASPs) to gain licenses from legal authorities before entering the EU market.
2. Has MiCA been passed?
The European Union Parliament passed a positive verdict for the MiCA crypto regulatory framework, approving its official implementation by early 2025.
3. Is Bitcoin covered by MiCA?
MiCA covers crypto assets which are not already governed by existing EU regulations, for instance, e-money tokens or asset-referenced tokens.
4. Is the EU directive for Blockchain?
The EU is building an EU-wide blockchain regulatory framework to ensure uniformity in legislation and to protect consumers while fostering innovation in this space.
5. Is the EU making Bitcoin traceable?
The EU travel rule that is set to be implemented in the crypto will ensure that all transactions become traceable and the CASPs can detect and prevent sanctioned transfers.
All content on Kryptos serves general informational purposes only. It's not intended to replace any professional advice from licensed accountants, attorneys, or certified financial and tax professionals. The information is completed to the best of our knowledge and we at Kryptos do not claim either correctness or accuracy of the same. Before taking any tax position / stance, you should always consider seeking independent legal, financial, taxation or other advice from the professionals. Kryptos is not liable for any loss caused from the use of, or by placing reliance on, the information on this website. Kryptos disclaims any responsibility for the accuracy or adequacy of any positions taken by you in your tax returns. Thank you for being part of our community, and we're excited to continue guiding you on your crypto journey!
| Country | Issue | Kryptos Use Case |
|---|---|---|
| India | Cryptocurrency transactions are taxed as capital gains, with evolving legislation creating uncertainty. | Kryptos.io streamlines the process by automatically tracking transactions and computing capital gains, adjusting to new regulations for precise reporting. |
| Brazil | Cryptocurrencies are subject to capital gains tax and must be reported, posing challenges with complex requirements. | Kryptos.io simplifies compliance by offering real-time transaction tracking and detailed tax calculations, making it easier to meet Brazil’s tax obligations. |
| Nigeria | Regulatory framework for cryptocurrencies is evolving, with uncertainty around taxation and restrictions from the Central Bank. | Kryptos.io provides an adaptable solution by maintaining detailed records and generating flexible reports, helping users stay compliant despite regulatory changes. |
| USA | Cryptocurrency transactions are subject to capital gains tax, with detailed IRS reporting requirements. | Kryptos.io enhances compliance by automating the tracking of transactions and generating comprehensive tax reports, facilitating adherence to IRS requirements. |
| UK | Cryptocurrencies are taxed under both capital gains tax and income tax, requiring careful tracking and reporting. | Kryptos.io aids UK users by monitoring both capital gains and income from crypto transactions, ensuring accurate and straightforward tax reporting. |
| Australia | Cryptocurrencies are subject to capital gains tax, and users must report their gains and losses to the ATO. | Kryptos.io assists Australian users by providing seamless transaction tracking and precise capital gains calculations, ensuring efficient compliance with ATO reporting requirements. |
| Germany | Cryptocurrencies are taxed as private assets with gains subject to tax if held for less than a year. | Kryptos.io supports German users by tracking holding periods and computing taxes on cryptocurrency transactions, ensuring adherence to German tax regulations. |
| Japan | Cryptocurrency gains are treated as miscellaneous income and are subject to high tax rates. | Kryptos.io helps Japanese users by offering a detailed tracking system and calculating taxes on miscellaneous income, efficiently managing high tax obligations. |
| Scenario | Description | Kryptos Features that can be of aid |
|---|---|---|
| Multiple Exchanges and Wallets | Consolidating records from various exchanges and wallets to maintain a comprehensive overview of crypto activities. | Seamless integration with numerous exchanges and wallets, automatic import, and consolidation of records. |
| International Transactions | Managing records for cross-border transactions, including currency conversions and compliance with international tax laws. | Support for multiple currencies, efficient management of cross-border activities, accurate currency conversion for reporting. |
| Complex Transactions | Handling trades, swaps, staking, lending, and other sophisticated crypto activities. | Advanced tracking, reporting, and documentation for various transaction types. Kryptos' DeFi and NFT modules offer specialized tools for managing decentralized finance and NFT activities, ensuring precise records and comprehensive oversight. |
As Web3 evolves, managing a diverse portfolio has become complex. Kryptos simplifies this with advanced tools for real-time tracking, NFT management, and DeFi analytics. Discover how Kryptos turns challenges into strategic advantages for modern investors.
Struggling with crypto tax in Australia? Kryptos.io simplifies the process, ensuring accurate and compliant filings with the ATO. Track transactions and value assets effortlessly—make tax season stress-free.
Mastering Crypto Taxation: Navigate the Complex World of Digital Assets with Kryptos, the Ultimate Solution for Accurate, Efficient, and Future-Proof Tax Reporting.
The European Union Parliament passed a positive verdict for the Market in Crypto assets (MiCA) regulatory framework, approving its official implementation in early 2025.
MiCA’s much-needed approval comes after the prominent collapses of big crypto players including FTX, Celsius, and Voyager. The framework ensures the protection of investors from further project failures and has been overwhelmingly accepted in the EU parliament with a vote of 517 for and only 38 against.
Mairead McGuinness, the European Commissioner for Financial Stability, Financial Services, and the Capital Markets Union gladly welcomed MiCA as the world’s first comprehensive crypto rulebook to safeguard investors and create a sustainable market.
MiCA: What It Is And Why It Matters
MiCA, or Market in Cryptoassets, is a new crypto regulation framework which requires crypto asset services providers (CASPs) to gain licenses from legal authorities before entering the EU market.
It primarily covers crypto assets that are not currently governed by the existing EU laws. For instance, electronic money tokens or asset-referenced tokens fall under the scope of MiCA.
The MiCA will be progressively implemented over the next two years with regulation of stablecoins taking place in July 2024. This will require the crypto providers to have trading caps on non-euro-denominated tokens not backed by fiat currency, and also maintain fund reserves. The broader MiCA rules governing these crypto platforms will come into effect by early 2025.
The European Banking Authority and the European Securities and Markets Authority will be responsible for ensuring compliance by the crypto platforms. They will also look into certain MiCA guidelines before its final implementation.
The rules have been developed for three years as an alternative to the US approach of regulating through enforcement which has been making companies like Bittrex move out of the state.
However, the EU’s decision is being considered to bring a new era in the development of cryptocurrency regulations. For instance, investors can opt for MiCA-approved crypto platforms over others to ensure financial security. This will also attract more crypto service providers to build in the EU market.
The approval of MiCA as the first regulatory guideline is expected to raise the bar of crypto legislation worldwide. It will also encourage crypto adoption as more consumers can invest in crypto platforms approved by legal authorities.
The “travel rule” used in traditional finance will now also apply to crypto where the exchanges have to provide the sender and recipient information for transactions to authorities. This will also be applicable for transfers above €1,000 from self-hosted wallets.
Taking about the MiCA implementation, Binance CEO Changpeng Zhao earlier tweeted,
“The European Parliament voted for MiCA to be implemented.
This means one of the world’s largest markets is introducing tailored regulations for crypto to protect users and support innovation.
The fine details will matter, but overall we think this is a pragmatic solution to the challenges we collectively face. There are now clear rules of the game for crypto exchanges to operate in the EU. We’re ready to make adjustments to our business over the next 12-18 months to be in a position of full compliance.”
As of now, crypto lending, NFTs and DeFi are not included in the legislation which still keeps scope for improvement in the current set of laws.
But even then, MiCA comes as the first step towards a larger global crypto adoption and regulation fostering innovation in this space.
1. What is the MiCA rule in crypto?
MiCA, or Market in Cryptoassets, is a new crypto regulation framework which requires crypto asset services providers (CASPs) to gain licenses from legal authorities before entering the EU market.
2. Has MiCA been passed?
The European Union Parliament passed a positive verdict for the MiCA crypto regulatory framework, approving its official implementation by early 2025.
3. Is Bitcoin covered by MiCA?
MiCA covers crypto assets which are not already governed by existing EU regulations, for instance, e-money tokens or asset-referenced tokens.
4. Is the EU directive for Blockchain?
The EU is building an EU-wide blockchain regulatory framework to ensure uniformity in legislation and to protect consumers while fostering innovation in this space.
5. Is the EU making Bitcoin traceable?
The EU travel rule that is set to be implemented in the crypto will ensure that all transactions become traceable and the CASPs can detect and prevent sanctioned transfers.
All content on Kryptos serves general informational purposes only. It's not intended to replace any professional advice from licensed accountants, attorneys, or certified financial and tax professionals. The information is completed to the best of our knowledge and we at Kryptos do not claim either correctness or accuracy of the same. Before taking any tax position / stance, you should always consider seeking independent legal, financial, taxation or other advice from the professionals. Kryptos is not liable for any loss caused from the use of, or by placing reliance on, the information on this website. Kryptos disclaims any responsibility for the accuracy or adequacy of any positions taken by you in your tax returns. Thank you for being part of our community, and we're excited to continue guiding you on your crypto journey!
As Web3 evolves, managing a diverse portfolio has become complex. Kryptos simplifies this with advanced tools for real-time tracking, NFT management, and DeFi analytics. Discover how Kryptos turns challenges into strategic advantages for modern investors.
Struggling with crypto tax in Australia? Kryptos.io simplifies the process, ensuring accurate and compliant filings with the ATO. Track transactions and value assets effortlessly—make tax season stress-free.
Mastering Crypto Taxation: Navigate the Complex World of Digital Assets with Kryptos, the Ultimate Solution for Accurate, Efficient, and Future-Proof Tax Reporting.
