European Union approves rules to tame 'Wild West' crypto market

Cryptocurrency companies will need a licence and customer safeguards to issue and sell digital tokens in the European Union under groundbreaking new rules agreed by the bloc to tame a volatile “Wild West” market.

Globally, crypto assets are largely unregulated, with national operators in the EU only required to show controls for combating money laundering.

Representatives from the European Parliament and EU states thrashed out a deal late on Thursday on its Markets in Crypto-assets (MiCA) law.

“Today we put order in the Wild West of crypto assets and set clear rules for a harmonised market,” said Stefan Berger, a German centre-right lawmaker who led negotiations on behalf of the parliament.

“The recent fall in the value of digital currencies shows us how highly risky and speculative they are and that it is fundamental to act,” Berger said.

Crypto markets have tumbled this year, pressured by the collapse of the terraUSD stablecoin and the freezing of withdrawals and transfers by major US crypto lender Celsius Network.

Bitcoin, the biggest token, has slumped some 70 per cent since its November record of $69,000, dragging down the overall market.

The landmark regulation confirms the EU’s role as a standard-setter for digital issues, EU states said.

“With the new rules, crypto-asset service providers will have to respect strong requirements to protect consumers’ wallets and become liable in case they lose investors’ crypto-assets,” they added.