A leaked draft of the text, reviewed by CoinDesk, shows the rules could apply to fractionalized NFTs.

The European Union has finalized the full text of its landmark Markets in Crypto Assets legislation. Officially, the text is still open to comments, but sources briefed on the talks have told CoinDesk that it is, in practice, finalized.

A leaked draft of the bill dated Sept. 20 and verified by CoinDesk urges EU enforcers to take a “substance over form” approach to the law, meaning its provisions could even apply to some assets categorized as NFTs.

In principle, NFTs are excluded from the framework, which requires issuers of crypto assets to publish white papers containing technical roadmaps, for platforms to register with the authorities, and requires stablecoin issuers to hold capital and be prudently managed.

NFTs are typically designed to have a unique digital identifier that cannot be copied, interchanged or subdivided, but the rise of fractionalized assets – where a set of fungible tokens are issued to represent one NFT – have been drawing some attention from regulators as they could resemble traditional securities.

While the leaked draft – thrashed out in a series of technical meetings following a June 30 deal – shows MiCA doesn’t apply to NFTs that are genuinely unique and incapable of being traded with each other, “the issuance of crypto-assets as non-fungible tokens in a large series or collection should be considered as an indicator of their fungibility,” the [final] compromise text says in a Recital, even if the issuer gave it a unique identifier.

A Recital is a text which introduces an EU law and sets out its motivation. Though not – unlike the substantive articles of the regulation – legally binding, a recital can be used by supervisors and courts when interpreting the scope of the legislation.

The details of the provision have caused concern within the industry. The exact drafting used could determine whether in practice the regulation covers the bulk of the NFT market – such as similar, but distinct Bored Apes, implying issuers and trading platforms would be caught by its strictures.

When considering whether to regulate a particular asset, national and EU regulators “should adopt a substance over form approach under which the features of the asset in question should determine the qualification, not its designation by the users,” the text added.

The post EU Finalizes Legal Text for Landmark Crypto Regulations Under MiCA appeared first on Crypto Insider.

The cryptocurrency exchange is also registered with regulators in Austria, France, Italy and Sweden.

Austrian cryptocurrency exchange Bitpanda is expanding to Spain, after registering as a virtual currency exchange and digital asset custody service provider in the country.

The company was officially entered into the Bank of Spain’s registry for crypto firms on June 16, according to the bank’s official website, and Bitpanda announced the news on Tuesday.

Bank of Spain opened its registry for crypto service providers back in October 2021, and Spanish crypto exchange Bit2Me became the first company to be added to the registry in February this year.

The European Union (EU) is planning to set up a license that would allow crypto firms regulated in one EU country to operate in others under its upcoming Markets in Crypto Assets (MiCA) bill. The MiCA framework is in the final stage of the EU’s legislative process.

But Bipanda, which had a valuation of around $4.1 billion as of August 2021, is not waiting around for the EU license to kick in, successfully registering in virtual asset service provider registries in both Italy and Sweden earlier this year. It registered with French securities regulator Autorité des Marchés Financiers (AMF) in 2020.

The firm’s regulatory efforts have not come without incident. In February, Bitpanda announced the acquisition of U.K. crypto custody platform Trustology. On the same day the announcement was made, the U.K. financial conduct authority (FCA) warned it was watching the acquisition closely. At the time of the announcement, Trustology was registered under the FCA’s Money Laundering Regulations (MLR) registry, but according to the FCA that was not enough.

“The MLRs do not include any provisions that allow the FCA to assess the fitness and propriety of beneficial owners or changes in control before a transaction is completed,” the FCA said in its February statement.

Bitpanda later told Bloomberg the FCA’s statement was expected, and that it has a goodrapport with the regulator.

In a Monday announcement, the firm said it remains committed to achieving regulatory status in countries, particularly in light of the recent turbulence in crypto markets. Crypto markets have recorded at least $7 billion in liquidations as of Monday, while over the weekend the price of bitcoin (BTC) fell below $20,000 for the first time since December 2020.

“As recent market developments have shown, where you buy your digital assets matters and we are going to always be prioritizing the safety of our community, as we are working relentlessly to build the best and the safest investment platform in Europe and beyond,” Bitpanda co-founder and co-CEO Eric Demuth said in a press statement.

The post European Crypto Unicorn Bitpanda Is Now Regulated in Spain appeared first on Crypto Insider.

A text threatening to prohibit cryptocurrencies relying on energy-intensive proof-of-work mining has been deleted from the draft legislation aimed at regulating the European crypto space. The move comes after the controversial provision sparked objections from the crypto community.

Wording that could have banned cryptocurrencies with proof-of-work (PoW) mining, like bitcoin, is missing in the latest version of EU’s Markets in Crypto Assets (MiCA) framework. The European Parliament (EP) was expected to approve the proposal on the last day of February but the vote was postponed to address concerns raised by representatives of the crypto industry.

“The Bitcoin ban in the EU is off the table for now,” BTC Echo noted, quoting the document. The German crypto news outlet revealed that the controversial paragraph has been dropped. The text proposed by the factions of the Left, Greens, and Social Democrats would have prohibited companies from offering services for the acquisition, custody and trading of PoW-based crypto assets.

The scheduled vote was canceled on the request of Stefan Berger, the rapporteur for the legislative package, who has now confirmed BTC Echo’s report in a tweet posted late on Tuesday. He also told the publication that negotiations have resumed.

“We now want to get the MiCA through the Parliament as quickly as possible,” Berger emphasized. His statement echoes a call issued by the President of the European Central Bank Christine Lagarde, who last week urged the EU to swiftly adopt the regulation in order to prevent Russia from using cryptocurrencies to evade sanctions imposed over its military invasion of Ukraine.

“Talks are in full swing,” assured Berger who is a member of the Committee on Economic and Monetary Affairs. Once the EP passes the regulatory package, its final adoption will depend on the outcome of the dialogue between the Parliament, the European Commission, and the EU member states. The executive body in Brussels will then evaluate the future implementation of the approved draft.

In the past few months, officials and regulators from several member states have called for an EU-wide ban on proof-of-work mining, pointing to its power-hungry nature. Sweden was among the first to insist on such a measure, citing bitcoin mining’s increasing use of renewable energy at the expense of climate neutrality goals in other sectors.

The post Proof-of-Work Ban Removed From Europe’s Proposed Crypto Regulation appeared first on Crypto Insider.