On Tuesday, Coinbase took bold steps towards stronger EU regulatory compliance by announcing its partnership with Crypto Risk Metrics, a German language provider of compliance and data solutions.
At the beginning of June, Coinbase secured a MICA license from Luxembourg, allowing the exchange to provide the full range of products to all EU member states.
MICA’s obligations may not be fully understood yet
Andrea Pantaleo, head of the Crypto Web3 and Fintech sector at DLA Piper, explained:
“If it’s a provider or trading platform that offers cryptography, such as most crypto exchanges, MICAR requires a Mikal-compliant white paper before it can legally operate within the European Union. Unfortunately, not everyone in the industry fully understands these obligations, but the situation is improving every day.”
The micro whitepaper rules aim to enhance consumer protection and provide a clear overview of the assets in question. In the past, regulators discussed how these requirements apply to different entities.
However, ESMA revealed this in an official statement entitled “On the provision of certain crypto assets services related to non-MICA compliant arts and EMT.”
“Before the ESMA statement, some companies found loopholes due to vague language in Mika regulations. It’s no longer an option. They’ll probably see the first enforcement action soon,” Pantaleo added.
Crypto risk metrics help clients stay compliant
When asked about the complexity of MICAR and the questions needed in the white paper, Tim Zölitz, CEO of Crypto Risk Metrics, replied.
“We don’t judge. We do our best to protect our customers and ensure that they are legally compliant. Personally, I understand some of the criticisms. I even agree that certain Mikali will put more burdens on European crypto asset service providers than other regions.
The concept appears to be working. Crypto Risk Metric clients include Kraken, Bitpanda, Okx, Bitstamp, Clearstream and Crypto Finance (Deutschland), which are part of the German stock exchange. Other well-known names also rely on the service.
The old proverbs still seem to be true:
“The US is innovating, China is replicating, Europe is regulated.”
Since it came into effect last year, the EU has approved 53 crypto companies under MICA regulations. However, players in major industry like Binance and Tether have missed their licenses.
Most of these licenses are granted by Germany. However, regulators have consistently discussed the complexity of mica.
Postcoinbase is raising a bar to comply with EU-compliant white papers.
