After lengthy deliberations and scrutiny, the MiCA regulatory framework has received its final approval. However, rather than being greeted with a wave of optimism, this latest development has triggered many concerns and unease.
MiCA Regulations Finally Approved
The Markets in Crypto Assets (MiCA) framework, first introduced in 2022, received final approval by the EU on Tuesday, May 16th, 2023. This groundbreaking regulation will take effect in 2024. This framework aims to foster transparency, consistency, and uniformity in the cryptocurrency industry across the European Union. It was initially scheduled for release in February but encountered setbacks, leading to its rescheduled launch in April.
A legal document titled “Regulation of the European Parliament and of the Council on Information” accompanying transfers of funds and certain crypto-assets and amending Directive (EU)’ has been introduced. This legal document makes it mandatory for identification to be provided for every crypto transaction carried out in the EU. The regulation aims to combat illicit cryptocurrency transactions and address concerns about money laundering and terror financing.
These newly approved regulations by the European Union are predicted to bring difficulties to countries like the United Kingdom and the United States. It will be especially difficult for the United States due to the uncertainties in their crypto regulations.
The MiCA regulation also includes a provision that requires companies wishing to create and trade cryptocurrencies and coins in the European Union states to obtain a license. This provision will help to achieve the crypto tax plan proposed by European Union lawmakers in January.
Elizabeth Svantesson, the finance minister of Sweden, firmly supports the MiCA regulations. She has emphasized the importance of protecting crypto investors in Europe.
Ledger Already Complies
Following the news on MiCA, Ledger unveiled a new update for its Nano X device. The latest addition introduces an innovative approach to the seed recovery phase. This new feature is called “ledger recover“.
This technique involves encrypting users’ seed phrases into three distinct shards, which are then securely distributed among three separate entities. Users can later rely on these entities to assist in reconstructing their seed phrases, ultimately allowing them to verify their identities.
Concerns Raised
Users and stakeholders are skeptical about Ledger’s encryption and transmission methods for the seed phrase in social recovery.
Although Ledger positions itself as a trusted hardware wallet provider that prioritizes user privacy, concerns have been raised regarding the potential storage of the seed phrase. The sarcastic remark from Binance’s CEO further fuels the ongoing debate and uncertainty surrounding Ledger.
