The European Parliament has approved the MiCA: the first official regulation concerning the Crypto world. The formalization will take place on May 16, 2023, the application at the end of 2024 for the entire sector. CZ of Binance said he was quite satisfied with this regulation, referring to the USA which through the SEC with Gary Gensler is trying to slow down the Crypto sector.
Gensler has quite confused ideas and is trying to hinder the Crypto sector, without even knowing what he is talking about (as seen in some press conferences). Gensler considered ETH a security in 2014 but in a 2019 press conference he reiterated that today it was decentralized enough to no longer be considered a security (but a commodity, like Bitcoin). If a crypto is considered a security, it is banned from the US market as it is considered unregulated.
We certainly know that there are many scams in the Crypto sector and at a regulatory level some exchanges choose their headquarters in tax havens or where the Far West exists, however the impression is that it seems to be trying to go against it regardless. Coinbase tired of the attacks coming from the SEC, will open a new office in Bermuda.
Algorand and Dash were considered security. For example, Algorand has been considered a security, due to the token sale conducted by the Algorand Foundation. The token sale was advertised on Twitter and featured a "refund policy" that allowed investors to give back the tokens after 1 year with a "satisfied or refunded" 90% of the amount spent. The problem would be the dependence of the price of the Algo token on the shares of the foundation itself. The blockchain would depend on centralized entities: the foundation and Algorand Inc (focused on the layer1 development of the protocol). The two entities have collaborated on projects and initiatives, holding the Algo tokens used for consent, network security and for any developments. Algorand Foundation owned 500 million of Algo, which reached 3 billion in 2022. What are their faults?
-They participate in the Governance
-They have huge stakes
-Encourage development and adoption
If the growth of a protocol is organic, that is one thing, if the foundation has large quantities of tokens (which can influence the price), pushes developments, does a lot of marketing, enters into partnerships, etc. in short, if it exposes itself personally to try to increase the adoption of the protocol thus the price of the token, could be attacked by the SEC. So Algo's investors would have a profit expectation based on the efforts of others (the two entities that govern Algorand): marketing, partnerships, any developments on the chain.
NEW MICA RULES AT THE END OF 2024
On April 20, 2023, MiCA (Market In Crypto Assets) and the TFR (Transfer Of Funds Regulation) were discussed. The MiCA concerns service providers and their licenses, while the TFR anti-money laundering laws. With regard to tokens, the legislation concerns stablecoins and tokens pegged to others (for example, those that trace metals to say) who will have transparency obligations in order to operate in Europe. That is, they will have to contain a reserve of funds in order to operate. Those who create new crypto will have to send regulators white papers and other useful information on the project (such as consensus algorithms). Exchanges will have to comply with regulatory bodies, demonstrating total transparency regarding: platform management, custody policies, reserves and anti-money laundering rules. In this regard, privacy coins such as Monero, Dash, Zcash and the like could be delisted from exchanges that will provide services in Europe.
WHAT DOES THE TFR SAY? ANTI-MONEY LAUNDERING RULES
As for the severance indemnity, it obliges service providers to identify users and report transactions worth more than €1,000. This will only apply to exchanges and centralized platforms. Obviously it is impossible to trace or KYC a non-custodial wallet. For more info: TFR
MY THOUGHTS
I believe that regulations are just "cash grabs" by governments and furthermore they only serve to "control" and possibly "censor". The narrative that passes is that exchanges will be safer but will it really be like this? Banks are also regulated, yet fail. Any attempt at control must be viewed with suspicion because the regulations come after governments have become aware of the crypto potential (both in terms of technical and economic characteristics). The identification of transactions over $1,000 is only used to have control and make checks for missing declarations because target is always the same: taxes (and earn more money). I personally will use exchanges as little as possible because Bitcoin is financial freedom and I don't want anyone to know the money I move. It is unconstitutional and even dangerous if these data archives are hacked (physical assaults, home thefts, etc).
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