In an announcement, the European Securities and Markets Authority (ESMA) specifically highlighted crypto assets and reminded companies that while regulation is on the way to adoption, crypto will remain unregulated in most jurisdictions. ESMA wrote:
“Specifically on crypto assets, while the Markets in Crypto-Assets Regulation (MiCA) is close to adoption, crypto assets offered by investment firms will continue to be unregulated in most jurisdictions until MiCA applies.”
ESMA expressed concerns over the products and services offerings that are not regulated. According to the regulator, these carry prudential and investor protection risks. In addition, the financial watchdog believes that it’s possible for clients to be “misled as to the level of protection they get.”
European Union's financial watchdog issued a statement to remind investment firms to make sure that their clients are aware of the regulatory status of the products they are offering.
To mitigate such risks, ESMA recommended that investment firms take measures that ensure that their clients are aware of the regulatory status of the products they are investing in. Apart from this, the regulator also advised firms to clearly inform clients when regulatory protections do not apply to the products or services that they are providing.
In addition, ESMA also urged investment firms to consider the impact of unregulated activities on their business when planning their risk management policies and systems.
İlginizi çekebilir: Avrupa Birliği, MiCA'yı kabul etti
Meanwhile, crypto firms are starting to set their businesses up in Ireland to expand their businesses in Europe. On May 25, crypto firm Gemini chose Ireland as its European base. Gemini founder Cameron Winklevoss confirmed that they've picked Ireland as their "entry point into the EU."
Apart from Gemini, crypto exchange Kraken has also started its preparations to expand its operations in Europe. On April 18, a subsidiary of the exchange based in Dublin was given a virtual asset service provider authorization by the country’s central bank.