FTX proves MiCA should be passed fast, officials tell European Parliament committee

cointelegraph.com:

The European Parliament Economic and Monetary Affairs Committee held a hearing on the "FTX cryptocurrency exchange collapse and implications for the EU" on Nov. 30. Three European monetary officials testified, talking about FTX, blockchain technology and crypto regulation in a “preliminary assessment of the events.”

European Securities and Markets Authority (ESMA) Risk Analysis & Economics Department Head Steffen Kern told the committee that ESMA “has neither regulated nor supervised FTX” and has no “information on the company beyond what is in the public domain.” The ESMA does not see significant risks to the broader financial sector from the collapse of FTX given the small portion of the total market represented by crypto and the limited connections between crypto and traditional finance.

Kern concluded by saying Markets in Crypto-Assets Regulation (MiCA) legislation, due to come into force in 2024, “is tackling the right issues to introduce vital protections for investors and important rules for market participants through a common EU regime.”

#FTX? What happened?FTX collapse is likely to cause major detriment to retail investors. The drop in value, #CryptoAssets risk and huge price volatility as well as aggressive marketing are among the implications for investors.#ESMA statement → https://t.co/KcEAWGIa0M pic.twitter.com/z1QLhcm0bw

On questioning, Kern said that FTX (EU) Ltd., which is domiciled in Cyprus, had received a Markets in Financial Instruments Directive license, in spite of the fact that the license is not intended to cover crypto. That license was suspended on Nov. 9.

Related: MiCA proponent cites FTX in advocating for regulation: ‘Crypto assets are not play money’

Member of the European Parliament and MiCA