Since Satoshi Nakamoto simplified the dream for a decentralized form of value and currency exchange in 2008, wave after wave of finance-related innovations has emerged. These innovators, with many taking on the roles and responsibilities of crypto-asset issuers and service providers, have found ways to simplify financial transactions and investments.
The majority of these innovators have built on the blockchain system for a distributed ledger technology (DLT) to do amazing things. As such, rather than only technically inclined people having the best of the provisions of the technology, ordinary people have also benefited greatly. Also, the lack of global regulations on the new system has allowed it to flourish, making overnight millionaires of timely miners and investors.
And while the uptake of cryptos in developed and developing countries grows daily, the uncertainties inherent in the system have caused hesitation in some quarters. The EU (European Union) is one of such hesitant parties.
Despite realizing the opportunities for sustainable growth and development that the system promotes, the EU has been mostly silent on maximizing the offerings of the crypto industry. Until the “Proposal for a Regulation for the European Parliament and of the Council on Markets in Crypto-assets, and amending Directive (EU) 2019/1937,” an initiative that is 167 pages long and consists of 126 articles, came into being.
This article analyzes this framework proposed by the EU in light of what it means, what the various stakeholders of the crypto industry should expect and an overall estimation of who the proposal is good for.
The European Commission published the proposal for a regulation of cryptos and their markets on September 24, 2020. However, the proposal was not adopted until November 24, 2021—more than 12 months later.
The EU’s proposed framework for the regulation of crypto-assets and markets is exactly what it says—an initiative to regulate the activities of the cryptos market and exchanges. However, it is not driven by any intention by the EU to control the industry, only to make it legitimate and trustworthy.
Also, the proposal intends to repair fragmentations in the European regulatory framework. This way, the entire region would have one block of regulatory measures rather than multi-varied national measures.
The EU used suggestions from the European Banking Authority (EBA) and the European Securities and Markets Authority (ESMA) in order to understand the full range of crypto mechanisms. This way, the conclusions can be as final as possible since it is backed by inclusive research.
What the EU wants to do is implement the full spectrum of its Digital Finance package in the crypto market. Once this is in place, Europe will be able to take full advantage of the offerings of cryptos and other crypto-related stuff without subjecting its citizens and economy to the pitfalls of the industry.
As the document reports, “One of the strategy’s identified priority areas is ensuring that the EU financial services regulatory framework is innovation-friendly and does not pose obstacles to the application of new technologies.” As such, the framework’s motivation can be summarized as the need to:
In short, the framework has four primary objectives:
The initiative does not cover every form of virtual money and currency. It only takes into consideration crypto-assets and other related assets that are driven by the blockchain distributed ledger technology (DLT). Thus, asset-referenced tokens and e-money tokens are the main punches of the initiative.
Also, the proposal covers two conditions for the operation of the crypto market, particularly for service providers. There is an opt-in option which means that those that want to stay unregulated can remain so. There is also an all-in harmonization option that insists on complete inclusion irrespective of prior plans. The EU insists on the second option.
Furthermore, the proposed regulation places the EBA and ESMA as competent authorities to oversee all activities related to crypto-asset exchanges. Thus, these are the regulatory powers at the forefront that are responsible for implementing the various conditions of the proposal.
To understand the core of the proposal, it is expedient to highlight the status quo of the crypto market and the dynamics of its stakeholders and transactions.
Presently, the crypto market is mostly unregulated (which means that there is no central authority supervising it) at least at a global level. By implication, it is an open market where there is a lot of freedom for decision-making.
Also, the extensiveness of the open crypto market means that anybody with sufficient knowledge of blockchains can take advantage of it. As such, there are many coins, protocols, exchange platforms, and more.
While these are the pros of the traditional unregulated crypto market, there are associated cons. Anonymity is a core element of the system, so criminal activity is unavoidable. Hoarding of funds—and whale activity by implication—is also a thing.
What the regulation proposal intends to accomplish is straightforward. It is to bring about harmonization between what cryptos can offer (along with DLT) and the financial obligations of the EU. This is why the legalization of the market and its agents is a leading objective of the proposed framework.
Presented in this manner, the framework has the best interest of crypto stakeholders at heart. For example, payment tokens can be better optimized to “... present opportunities in terms of cheaper, faster and more efficient payments, in particular on a cross-border basis, by limiting the number of intermediaries.”
So, the framework bridges decentralized finance (DeFi) with its centralized alternative (CeFi). Thus, what the EU means to do is
The crypto market consists of many stakeholders all of whom can be categorized under three classes: crypto-asset issuers and service providers; miners and crypto traders; and investors.
There are clear pros to the proposed EU framework. For one, banks can now work with the crypto industry without fear. The risks associated with anonymity (which is an integral component of the current crypto market) are also reduced substantially.
Also, different crypto regulatory regimes and frameworks across Europe make it difficult to truly utilize the opportunities afforded by crypto applications in the region. A unified framework is good.
Moreover, the framework is great for consumers (that is, crypto investors and traders). Protection right is up there with greater security as the system looks to be customer-centric. Also, market manipulation might become a thing of the past due to the lid that the initiative places on insider information.
However, there are also clear cons. For one, there are many restrictions for the issuers of crypto-assets and crypto-related service providers. These would have to consider every offer to the customer as being liable to cancellation by the EU regulation.
Also, the regulation appears to be true in every sense of the word. This might likely cut down the number of crypto issuers and project developers since they do not all have fleshed-out ideas (and will likely be penalized for it).
Furthermore, the EU framework will ensure that there are fewer surprises now that insider information has to be leaked (in a sense) by the service providers themselves. This should have no significant effect on innovation, but there is no guarantee that it won’t.
Overall, the EU framework is as promised: a great development for crypto users/consumers. But it is not so great for crypto service providers. Also, the proposed regulations are strong and can be interpreted as having upended the core quality of the blockchain revolution.
We are excited to announce the return of PrimePool, in partnership with Huobi! For now, users can lock their HT tokens for any length of time before the event ends to earn a reward of up to 1,208,898 KRRX tokens.
The event will run from 12:00 UTC on January 18, 2022, to 12:00 UTC on January 25, 2022, so make sure to participate before the event ends.
Specifically, you can lock any number of HT tokens from 100 units and receive an additional reward in KRRX tokens for doing so (the reward is calculated according to a formula that you can find on the event page at the link below).
This is a great opportunity for users to experience the upgraded PrimePool and win grand rewards. With simple rules, this event is open to all!
To join the event, all you need to do is visit the link provided and follow a few steps.
Your Kyrrex Team 💚
We are happy to announce that Huobi, one of the biggest and most reputable cryptocurrency exchanges in the world, has listed the KRRX token!
Huobi has already enabled deposits for KRRX holders. You can start making KRRX deposits right now!
KRRX spot trading (KRRX/USDT) will open when the deposit volume meets the requirements for market trading on Huobi. Once the trading volume threshold has been met the commencement date of KRRX/USDT spot trading will be officially announced.
KRRX withdrawals will open at 12:30 (UTC) on January 18
The KRRX token provides a seamless way to interact with services and features on the Kyrrex network. All KRRX holders are entitled to discounted fees, staking benefits, and other special advantages.
KRRX is connected to many inner projects as well as linked to numerous initiatives, including significant partnerships in the sports industry. Currently, Kyrrex intends to expand agreements with MotoGP rider Jorge Martin, Moto2 young talent Pedro Acosta, and paddle athlete Martin Di Nenno.
Moreover, will launch Kyrrex Sport soon. A marketplace for potential athletes' image rights that are represented by fungible tokens (not NFTs) as well as an NFT marketplace for their personal collections.
This listing is a major milestone for Kyrrex as the company aims to make the KRRX token more accessible to users around the world. We are confident that Huobi's high liquidity and solid reputation would be extremely beneficial to our users.
To further improve the Kyrrex ecosystem, we will continue to reinforce existing collaborations and explore new strategic partnerships with industry stakeholders.
Your Kyrrex 💚
The tournament offers a massive prize pool of 50,000 KRRX and guaranteed payouts for 500 winners, providing all participants with the opportunity to come out on top.
The tournament will run from January 17th to February 1st, giving participants ample time to demonstrate their trading strategies and compete for the top prizes.
Don't miss out on this exciting opportunity to win big and register for the tournament today!
1️⃣ Register on the Lot.Trade;
2️⃣ Create a new account on huobi.com;
3️⃣ Create an API key on the Huobi exchange and connect it to your Lot.Trade Personal Account;
4️⃣ Achieve a trading volume of at least 150 KRRX within 24 hours after registration;
5️⃣ Actively trade KRRX from the created profile on Huobi throughout the tournament, until its completion on 01.02.2023;
6️⃣ Wait for the results and get the desired prize
The first 1500 users who successfully complete the registration and trading conditions within 2 days after the tournament begins, will receive a bonus of $10. This is a limited offer, so don't miss out on this bonus opportunity.
So, are you ready to join the Kyrrex and Huobi crypto communities and compete for a prize pool of 50,000 KRRX and guaranteed payouts for 500 winners? Then fulfill the registration and trading conditions now and join our exciting crypto tournament.
Your Kyrrex 💚