European Central Bank supervisory board member Elizabeth McCaul said on Wednesday that the European Union's proposed regulations for crypto assets do not go far enough and that security measures need to be strengthened to adequately detect risks.
The European Parliament will vote on the Crypto Asset Markets (MiCA) bill later this month, taking a major step forward to ensure oversight of the crypto world after a series of scandals and crashes.
McCaul Requests More Regulations for Cryptocurrencies and Exchanges
"While the new Basel standard and MiCA are important milestones, I'm afraid they won't be enough on their own," McCaul said in a blog post.
McCaul added to his thoughts:
“Under the principle of proportionality, major crypto-asset service providers should be subject to both stricter requirements and enhanced control: neither of these is covered by MiCA.”
“Actually the largest cryptocurrency and Bitcoin company, Binance claims to have between 28 million and 29 million active users worldwide, but it probably won't even meet the threshold to be classified as important in the EU,” McCaul said.
McCaul argued that there is a need for new quantitative metrics that can take into account the type of business, such as transaction volume for trading platforms or assets in custody for custodians.
Given the complexity of the activities, McCaul said, thresholds should be measured at the group level rather than at individual organizations. McCaul noted that the same applies to conflicts of interest, which must be defined across the group and within affiliates.
*Not investment advice.