The European Parliament has approved new regulations for the trading of cryptocurrency, which are set to take effect in July 2022. The measures aim to prevent money laundering, terrorist financing and other illegal activities by ensuring that crypto assets can be traced.
Major service providers will also be required to disclose their energy consumption, as they often have a high carbon footprint. Trading facilitators will have to register with an oversight body. The regulations were passed with 517 votes in favour, 38 against and 18 abstentions. Some MEPs believe that cryptocurrencies are still in their early stages, with doubts over their long-term future. However, the European Union is one of the first legislative bodies to regulate crypto markets.
The regulations were proposed after the Health Service Executive was hacked in 2021, with the attackers demanding a cryptocurrency ransom. The new regulations will also have a climate element, with service providers required to disclose their energy consumption. According to the European Commissioner for Financial Services, Mairead McGuinness, the new measures will allow the sector to develop in a safer environment.
Sinn Féin MEP Chris MacManus, who was involved in negotiating the regulations, said that while he did not necessarily want to encourage the growth of cryptocurrencies, he believed that regulating the market was necessary. He added that the future viability of cryptocurrencies was uncertain. MEPs have agreed that regulations will need to be updated on an ongoing basis to keep pace with the evolving crypto sector.