Eternity Law International News Crypto regulation consultation

Crypto regulation consultation

September 13, 2023

The cryptocurrency market is actively developing around the world. In many leading countries, documents are already appearing that allow to establishment of legal control over the process of trading with cryptocurrencies, their storage, and other operations in this sphere. Every year there are more and more crypto company for sale of popular coins.

To legally operate in this market, corps need to obtain special licenses. Without them, the functioning of legal-entities in this sphere is practically impossible. However, despite all the successes of the market, many people still do not understand how the supervision of the crypto market is carried out and with the help of what regulations it is carried out.

Repeatedly, representatives of this sphere came out with requests or consultations to regulators regarding the possibility of special consultations. ESMA representatives were the first to respond to this question. Employees of this European regulator have already issued documents detailing the rules of regulation of cryptoasset markets. Representatives of the organization ask market participants to express their opinions by the end of the second decade of September.

What exactly is specified in the consultation packages

ESMA representatives collectively plan to release 3 consultation packages. However, only the first package has been released so far. It outlines the proposed rules for companies supplying cryptocurrency assets. In particular, the document outlines:

  • steps for approval of vendor status;
  • ways to address and resolve conflict situations;
  • procedures for handling complaints from clients and service providers.

ESMA would also like to receive more information from respondents regarding current and future operations. This will help generate more data regarding the cryptoasset market in the EU and the growth prospects of corps that have obtained a VASP license.

In addition, the regulator is interested in other aspects of such corps operations. They expect feedback from corps regarding expected market turnover, number of published documents, and online and offline trading volumes. Such feedback will further help to refine the proposals in the next two consultation packages.

Why these consultation packages are important

First and foremost, documents of this format help to form strict and clear rules for regulating the crypto market. Thanks to these documents, service providers understand which dealings will be legal and how to deal with their customers. Service users understand how they can best choose a provider and what to look out for.

Since the EU already has certain documents in place to help regulate this market, virtual services provider already understand how best to operate and what transactions to look out for. However, the consultation-packages will help identify places in the legislation that can be improved and help cryptocurrency-companies operate.

Such a step has not been applied before ESMA staff not only in the EU but also in the rest of the world. Therefore, the availability of such advisory packages is crucial for the development of this market and the discovery of its potential.

As ESMA representatives comment on this situation

Verena Ross, Head of ESMA, has already stated that the availability of consultation packages will be an important step for the implementation of the MiCA framework. Thanks to the implementation of the first package, ESMA representatives expect to set high standards in the regulation of crypto-businesses and define specific requirements for such companies.

The organization also believes that advisory packages will help to ensure the influx of new players to the market, who are ready to work under strict, but very clear rules. However, ESMA immediately warns that even after the implementation of all advisory packages, 100% safe cryptoassets will not appear on the market due to the volatility of this market.

In addition to direct advice for new and existing cryptocurrency-companies, ESMA wants to continue to develop new advisory packages. In October 2023, the second package is planned to be released, after which discussions will begin on the rules and regulations that will be presented there.

ESMA assures that the feedback received after the consultations is collected for a reason and the organization will pay attention to constructive comments from crypto-players. Tentatively, the regulator’s representatives promise to provide a final report and a draft with technical standards by June 30 next year.

Who will help to understand the requirements of ESMA

If you actively analyze the requirements of this regulator, you can see that there are no special difficulties here. However, its representatives are very scrupulous and actively study all the documents provided to them. Therefore, we recommend you to consult our specialists.

Each of our employees is a professional in this field and can provide you with quality advice. We regularly improve, and study all regulations that relate to crypto-business and are ready to help you in the development of any submitted application. With us, you will safely launch your business at a time when your competitors are just trying to get permission to operate.

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