EU’s Liberating Gesture: Bitcoin Miners Escape Regulatory Shackles 🤔💰

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  • BTC miners and validators have been granted a reprieve from ESMA’s market abuse reporting, a move viewed as positively flexible for the evolving crypto landscape. 
  • Circle’s policy lead, Patrick Hansen, hailed the decision as a balanced approach to fostering innovation without stifling the industry. 

Bitcoin [BTC] miners and PoS (proof-of-stake) validators have found themselves in a peculiar state of grace, as the EU’s regulator has seen fit to exempt them from the onerous task of reporting market abuse. 🎉

Back in December, the European Securities and Markets Authority (ESMA) concluded that miners, validators, builders, and searchers were to be excluded from the category of Persons Professionally Arranging or Executing Transactions (PPAETs). 

Under the EU’s Markets in Crypto-Assets Regulation (MiCA) guidelines, PPAETs are tasked with the noble duty of monitoring and reporting market abuse. Most of these PPAETs will now be crypto asset service providers (CASPs), such as exchanges. 

Patrick Hansen, Circle’s director of EU strategy and policy, couldn’t help but express his amusement and approval at the regulator’s decision, deeming it ‘flexible’ on crypto to balance innovation with compliance. He said, 

“ESMA also decided not to rigidly define PPAETs in the regulatory technical standards (RTS), keeping room for flexibility as the market evolves.” 

Hansen added that including miners and validators under PPAETs would have been a surefire way to increase the regulatory burden on operators, potentially driving them to greener pastures. As a result, this could have ultimately pushed innovation offshore. 🚀

Thus, the exemption is expected to spur financial innovation in the region, much to the delight of those who have long complained about the heavy hand of regulation. 

“Good to see they took the potential negative impact for the industry and the EU into account, highlighting how a different decision could have incentivized these miners/validators to leave or avoid establishing in the EU, pushing innovation offshore.” 

Regulators tout MiCA as the most comprehensive crypto regulation, which took effect in June 2023. They implemented the stablecoins provision in mid-2024, leading to the delisting of several non-compliant tokens from multiple exchanges. 📜

For example, most exchanges operating in the EU, including Binance, delisted Tether’s USDT, giving Circle’s USDC a massive regulatory moat in the region.

TradingView data revealed that USDC’s market cap increased nearly 80% since MiCA went live. Its size was at $57B, slightly above the 2021 cycle peak.  

Although USDT also made a new high of $142B in market cap, its growth was a mere 28% over the same period. This implied that USDC saw massive growth post-MiCA implementation, much to the chagrin of its competitors. 🤷‍♂️

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2025-03-07 14:09