Key Points
- EU’s regulator, ESMA, has exempted Bitcoin miners and PoS validators from reporting market abuse.
- This move is seen as positive and flexible, potentially spurring financial innovation in the region.
Bitcoin [BTC] miners and PoS (proof-of-stake) validators have been given a reprieve by the EU’s regulator. They are no longer required to report instances of market abuse.
The European Securities and Markets Authority (ESMA) decided last December that miners, validators, builders, and searchers would not be classified as Persons Professionally Arranging or Executing Transactions (PPAETs).
EU’s Flexible Crypto Regulation
This decision has been met with approval by many in the crypto community. Patrick Hansen, director of EU strategy and policy at Circle, praised the regulator for its adaptability in dealing with the evolving crypto markets. He stated that ESMA’s decision to avoid rigid definitions for PPAETs in the regulatory technical standards (RTS) allows for greater flexibility.
Hansen further explained that if miners and validators were included under PPAETs, it would increase the regulatory burden on operators. This could potentially drive them to establish their operations outside of the EU. The exemption, therefore, could encourage financial innovation in the region.
Impact of MiCA on Crypto Markets
MiCA, touted as the most comprehensive crypto regulation, was implemented in June 2023. The stablecoins provision was introduced in mid-2024, resulting in the delisting of several non-compliant tokens from various exchanges.
For instance, many exchanges operating in the EU, including Binance, delisted Tether’s USDT. This gave Circle’s USDC a significant regulatory advantage in the region.
Data from TradingView showed that USDC’s market cap increased by nearly 80% since MiCA was implemented. Its market cap was at $57B, slightly above the 2021 cycle peak.
Although USDT also reached a new high of $142B in market cap, its growth was 28% over the same period. This indicates that USDC experienced significant growth following the implementation of MiCA.