Forex in this article
• EU agrees on uniform legal framework for crypto assets
• Compromise between the European Parliament and EU countries on NFTs
• A European Commission adviser believes that few assets benefit from the NFT exemption
Co-hosted by FactBlock with Hashed, Korea Blockchain Week 2022, a crypto and blockchain event in Seoul, August 7-14, brought together crypto enthusiasts and the brightest minds in the industry for keynotes, panel discussions , contests and investor meetings to network and discuss the future of blockchain, cryptocurrencies, DeFi, NFT, Metaverse, Web3 and much more.
News about NFTs also surfaced: European Commission adviser Peter Kerstens told attendees how CoinDesk reports that for non-fungible tokens (NFTs) that are part of a collection, the new crypto rules of the European Union would have to be applied.
European Parliament and member states agree on crypto directive
On June 30, representatives of the European Parliament and EU member states agreed on a European directive for cryptocurrencies called “Crypto Asset Markets”, or MiCA for short. The new set of rules is expected to enter into force in the EU by the end of 2023 and create a uniform legal framework for trading crypto assets in the European Union. Regulation should focus on investor protection.
In the future, licenses for companies wishing to issue and sell cryptocurrencies such as Bitcoin and Co. in the EU will be required. In addition, the EU wants to be able to trace crypto transfers, which is why crypto platforms – regardless of the amount transferred – must determine sender and recipient information and, if necessary, pass it on to the responsible authorities. Direct transfers between platform-independent crypto wallet owners should be left out here – if crypto platforms handle such transactions, however, there should be an obligation to provide information from 1,000 euros. The new regulations also aim to give stablecoin holders the right to get their money back for free. Providers must in future be able to demonstrate a minimum level of liquidity. They must also be supervised by the European Banking Authority (EBA). In addition, crypto companies must also disclose data on energy consumption and environmental impact after the law takes effect.
Compromise on NFTs
However, representatives of the European Parliament and EU countries disagreed on one topic for a long time: NFTs. While European parliamentarians wanted NFTs to be included in the regulation, EU countries opposed it. In the end, both sides reached a compromise: NFT supervisors should only be able to demand compliance with crypto regulations under certain conditions. If NFTs behaved like traditional securities, EU MiFID financial market rules could apply. Within a year and a half, the European Commission intends to examine whether separate regulations are necessary for NFTs.
Only a few assets should benefit from the exception for NFTs
However, as CoinDesk reports, comments from Peter Kerstens of the European Commission during Korea Blockchain Week 2022 indicated that this exemption should not bring much relief to NFTs. EU lawmakers “understand an NFT very narrowly,” according to Kerstens, implying that few assets are likely to actually benefit from this exemption. “If a token is issued as a collection or series – although the issuer may refer to it as an NFT and although each individual token in that series may be unique – it is not considered an NFT, therefore requirements apply,” echoes CoinDesk Kerstens, which points out that publishers of NFT collections should publish a “white paper” for each NFT in the future, which is akin to a securities prospectus for stocks – which he said would be “stupid”. Nor, according to Kerstens, should publishers entice people to buy, for example with absurd promises about the future value of NFTs.
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