The European Union should hold off on more crypto regulation following the collapse of exchange giant FTX, European Parliament member Stefan Berger said on Twitter. The lead negotiator on the Markets in Crypto Assets (MiCA) file added that regulators should wait until new EU laws about crypto come into force.
“The FTX disaster is the result of missing regulation,” MEP Berger originally tweeted in German, adding: “Governments should not excessively over-regulate now, but follow MiCA. With global MiCA rules, you would have internal control mechanisms, separation of customer assets/funds, proof of good management, white paper.”
The center-right MEP previously told The Block that “MiCA is the bulwark against Lehman Brothers moments such as the FTX case." FTX, previously valued at $32 billion, saw a dramatic downward spiral throughout the month of November. The exchange filed for bankruptcy protection on Nov. 11. The filing cited a “complete failure of corporate controls."
Many EU policymakers and experts agree that MiCA’s rules on regulating crypto asset service providers would have mitigated the impact of the meltdown. However, other politicians are more reserved about how much MiCA could have solved since the meltdown was a result of a broader linkage of financial bodies, and because FTX is not headquartered in the EU.