The European Parliament has approved new regulations for cryptocurrency trading which will come into effect from July 2022. The regulations aim to combat money laundering, terrorist financing, and other criminal activities by allowing for the traceability of crypto assets.
Furthermore, service providers will be required to disclose their energy consumption to combat their high carbon footprint, and those facilitating crypto trading will need to register with an oversight body. The regulations were passed with a majority of 517 votes in favor, 38 against, and 18 abstentions.
The need for these regulations arose after a cryptocurrency ransom was demanded by hackers who attacked the Health Service Executive in 2021. The regulations aim to create a safer environment for the cryptocurrency sector to evolve, according to the European Commissioner for Financial Services, Mairead McGuinness. While some MEPs have doubts over the long-term future of cryptocurrencies, the European Union has become one of the first legislative bodies to regulate crypto markets.
Sinn Féin MEP Chris MacManus, who negotiated the new regulations, believes that regulating the crypto market is necessary, despite his reservations about fostering its growth. He added that continuous updates to the regulations will be necessary as the crypto sector continues to evolve.