Regulations for executives and owners of cryptocurrency companies have been recommended by the European Union (EU). The Markets in Crypto Assets regulation (MiCA), a historic new crypto law for the EU, is scheduled to go into effect in December 2024. The regulations place restrictions on employee and company bonuses as well as ownership and control. A cryptocurrency corporation will check shareholders with more than 10% of the shares for prior convictions or sanctions.
According to the new MiCA legislation, applicants for cryptocurrency licences must demonstrate that their owners and executives have a solid reputation. If executives don’t pass the test, MiCA authorizations, which will allow crypto businesses to operate throughout the 27-nation bloc, can be revoked.
Comments on the consultation are welcome through January. According to the EU rulemaking bodies responsible for banking and securities markets law, the EBA and ESMA, shareholders and board members of crypto asset service providers must not have been convicted of offences related to money laundering, terrorist financing, or any other offences that would harm their good reputation.
Companies creating stablecoins, a sort of cryptocurrency linked to the value of other assets like fiat, would also be subject to limits on employee bonuses under the proposed measures. Regulators want to emulate contentious policies adopted by the banking industry to reduce excessive risk-taking.