In an open letter to EU regulators, 40 crypto companies’ representatives called on authorities in an effort to ensure practicality in regulations imposed on the crypto industry.
The letter comprised of Web3 businesses across Europe asking for a steady framework for regulating digitalized tenders and transactions. The representatives were anxious as to how the European Commission, the Parliament and other EU institutions would go about laying a foundation for policies regarding crypto trading compliance. The need for a structured approach is of utmost importance when it comes to innovation within Web3 startups and other crypto businesses.
Along with safeguarding privacy of consumers, it is also conducive for the development of Web3 in Europe if regulators decide upon a standardized skeleton that pushes for innovation in said industry. With current compliance procedures being somewhat restraining to individual freedom, the letter expressed its desire to undertake regulatory measures that do not negatively impact the growth of Web3 in Europe. Recently, an NFT taskforce in Japan had requested their government to consider appointment of a Web3 minister in order to adequately govern over crypto spaces that also incorporate similar principles of freedom and innovation for the development of Web3, as in Europe.
“We wish to urgently convey our concern with proposed EU laws that threaten the privacy of individuals as well as digital innovation, growth and job creation in Europe.”
Representatives who signed this letter also wanted to make it known that they do not fully support recent proposals made by EU legislators that places severe disclosure requirements upon non-custodial wallets. This makes it difficult for private European consumers as well as other Web3 businesses to function effectively. They wished for legislators to consider not exceeding FATF Travel Rule Recommendations that require stringent measures for crypto industries to legally register and systematize their overall functioning in accordance to regulatory verification policies.
Crypto Asset Services Providers or CASPs consist of formulated compliance rules and stakeholders want EU regulators to keep in mind that “decentralized protocols and entities are exempt from legal entity organization and registration.” Co-signers of the letter include Diana Biggs of DeFi Technologies, Pascal Gauthier of Ledger and Lane Kasselman of Blockchain.com among others. Recently members of some Parliament Committees also voted for accurate verification regarding transactions made between unhosted wallets and service providers. This was done in an attempt to regulate money laundering within crypto services. The move was strongly criticized by Web3 and crypto enterprises, as it was considered to be too rigorous and exacting.
