EU Draft Regulation Threatens Crypto Industry But the Fight Is Not Over Yet
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Yesterday’s decision by lawmakers to approve controversial amendments to the Transfer of Funds Regulation (TFR) could put many crypto exchanges in jeopardy in the European Union. However, the crypto sector is determined to keep fighting against the looming clampdown, as indicated by recent statements by industry representatives.
The Crypto Council for Innovation remained worried but relatively optimistic regarding the potential for derailing the regulation’s controversial provisions at a further stage of EU legislative work.
“We are heartened by the fact that the provisions only passed by thin margins,” the body said in a statement. “We hope that the ongoing dialogue represents an opportunity to move forward in a tech neutral and innovation-friendly manner.”
Pascal Gauthier, CEO of hardware wallet maker Ledger, tweeted that the latest decisions could shape Europe’s sovereignty and competitiveness in the digital world.
“Policymakers should adopt a constructive approach that does not stifle innovation but rather empowers Europe to create tomorrow’s tech giants and seize the full potential of Web3,” said Gauthier, adding:
“We are certainly disappointed in this outcome, but the fight is not over.”
He was backed by Nicolas Louvet, CEO of crypto business Coinhouse, who said the industry would “keep working to demonstrate this was the wrong choice” by European lawmakers.
This perception of a gloomy forecast for Europe’s crypto industry, should the controversial measures be implemented, was also shared by crypto-focused journalist Niko Jilch.
“A sad day for Europe, but not all is lost yet. They are trying to fit a new technology into legacy rules; it’s going to fail,” he said. “The question is only: Will there be a crypto industry left in Europe when they realize their mistake or will the US once again rule the digital day?”
The controversial decision was made by lawmakers from the European Parliament’s Committee for Economic and Monetary Affairs (ECON) and the Committee on Civil Liberties, Justice and Home Affairs (LIBE). The legislation could pave the way for a crackdown on so-called ‘unhosted wallets’ — the term institutions use to refer to regular wallets — a construct that has little connection to the reality of day-to-day operations of crypto exchanges.
Following the vote, the draft is now expected to be set for informal tripartite discussions, also known as trilogues, which could end with a provisional agreement on the draft legislation by the European Union institutions. A potential agreement will be informal, and it will need to be formally approved by each of the three institutions: the Parliament, the Council of the European Union, and the European Commission.
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