In light of FTX’s collapse, activities of off-shore crypto companies operating in the EU are under a microscope for the bloc's regulators.
The European Securities and Markets Authority is responsible for establishing implementation details on the Markets in Crypto-Assets (MiCA) regulation, which is expected to be enacted in 2024 at the earliest.
All member states will have the power to “bring down advertisements and websites for unauthorized crypto venues,” said Jan Ceyssens, head of digital finance in the European Commission, at an event in London. “Once MiCA will be there […] authorities will track down those who may still be active but not have the authorization."
“We will have common ESMA guidelines which will indicate what is reverse solicitation as opposed to what is covered by the rules,” Ceyssens added, referring to a technique that enables off-shore companies to continue accessing the EU market, even without a license.
The issue of reverse solicitation surfaced in last week’s FTX hearing at the European Parliament. Steffen Kern, head of the risk analysis and economics department at ESMA, said that reverse solicitation is a “particularly pronounced problem” in crypto and is a matter of concern for the regulator.
"This market is by and large an offshore market," Kern added. "In many cases, we don't even know in which jurisdiction the assets are located, which doesn't make things any easier." Kern also noted that players outside the EU are expected to continue playing a dominant crypto-market role.
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