Bitcoin miners and PoS validators in the EU can breathe a sigh of relief as ESMA, the European Securities and Markets Authority, has decided to exempt them from reporting market abuse. This decision, part of the Markets in Crypto-Assets Regulation (MiCA) guidelines, aims to exclude miners, validators, builders, and searchers from the category of Persons Professionally Arranging or Executing Transactions (PPAETs).
The move has been welcomed by industry experts, with Circle’s policy lead viewing it as a positive and flexible approach to regulating the evolving crypto markets. Patrick Hansen, Circle’s director of EU strategy and policy, praised ESMA for its flexibility in not rigidly defining PPAETs in the regulatory technical standards (RTS), allowing room for adaptation as the market evolves.
Hansen emphasized that including miners and validators under PPAETs would have increased the regulatory burden on operators, potentially driving them offshore. By exempting them from reporting market abuse, ESMA has created a conducive environment for financial innovation in the region.
MiCA is hailed as the most comprehensive crypto regulation in the EU, with its stablecoins provision coming into effect in mid-2024. This led to the delisting of non-compliant tokens from several exchanges, giving Circle’s USDC a regulatory advantage in the market. As a result, USDC’s market cap has seen significant growth since the implementation of MiCA, outpacing the growth of USDT.
Overall, the exemption of miners and validators from reporting market abuse is seen as a step in the right direction for fostering innovation in the crypto industry. ESMA’s flexible approach to regulation is poised to support the growth of the sector while ensuring compliance with regulatory standards.