Crypto investor protections won’t take effect in EU until late 2024
Cryptocurrency investors in Europe are not yet protected under European Union cryptocurrency asset market rules, and it will take some time for the protections to take effect.
On Oct. 17, Europe’s securities regulator, the European Securities and Markets Authority (ESMA), issued a statement about the transition to the European crypto regulations known as the Markets in Crypto-Assets Regulation (MiCA).
The ESMA emphasized that MiCA-based crypto investor protections will not come into effect until at least December 2024, meaning that investors must be prepared to lose all the money they plan to invest in crypto. The authority added:
“Holders of crypto-assets and clients of crypto-asset service providers will not benefit during that period from any EU-level regulatory and supervisory safeguards […] such as the ability to file formal complaints with their NCAs [National Competent Authorities] against crypto-asset service providers.”
Even after December 2024, there is no guarantee investors will be fully protected by MiCA up to 2026. After MiCA becomes applicable to crypto asset service providers in late 2024, member states still have the option of granting crypto service providers an additional 18-month “transitional period” allowing them to operate without a license, which is also referred to as a “grandfathering clause.”
“This means that holders of crypto-assets and clients of crypto-asset service providers may not benefit from full rights and protections afforded to them under MiCA until as late as July 1, 2026,” the ESMA wrote. Most NCAs will have limited powers to supervise those who benefit from the transitional period, depending on local laws.
“In most cases, these powers are confined to those available under existing anti-money laundering regimes, which are far less comprehensive than MiCA,” the ESMA added.
Retail investors must be aware that there will be no such thing as a safe crypto asset even once MiCA is implemented, the authority stressed, adding:
“ESMA reminds holders of crypto-assets and clients of crypto-asset service providers that MiCA does not address all of the various risks associated with these products. Many crypto-assets are by nature highly speculative.”
The latest warnings from the ESMA come shortly after the regulator released a second consultative paper on MiCA on Oct. 5 after enforcing the regulations in June 2023.
Related: EU mulls more restrictive regulations for large AI models: Report
During the implementation phase of MiCA, the ESMA and other related authorities are responsible for consulting with the public on a range of technical standards that are expected to be published sequentially in three packages.
Officially introduced in 2020, MiCA aims to provide legislation to regulate crypto assets in Europe by amending existing laws, specifically Directive 2019/1937. The groundwork of MiCA was initiated in 2018 due to the growing public interest in investing in cryptocurrencies.
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Sir Keir Starmer and Emmanuel Macron’s migrant deal comes into force today, with detentions set to begin by the end of the week.
The “one in, one out” pilot scheme – which allows the UK to send some people who have crossed the Channel back to France in exchange for asylum seekers with ties to Britain – was signed last week, and has now been approved by the European Commission.
Politics Hub: Follow live updates
It comes as 2025 is on course to be a record year for crossings.
Approximately 25,436 people have already made the journey this year, according to PA news agency analysis of Home Office figures – 49% higher than at the same point in 2024.
The prime minister and the French president hailed the deal as a “good agreement” when it was first announced during the latter’s visit to the UK last month.
The scheme also means that anyone arriving in a small boat can be detained immediately, with space set aside at immigration removal centres in anticipation of their arrival.
Sir Keir said the ratification of the treaty will “send a clear message – if you come here illegally on a small boat you will face being sent back to France”.
Ministers have so far declined to say how many people could be returned under the deal, however, there have been reports that under the scheme only 50 people a week will be returned to France.
Analysis: Deal will need to go much further to work
Sky News political correspondent Rob Powell said while it was a “policy win” for the government, the numbers must eventually “go a lot higher” than 50 per week if it is to work as a deterrent.
“The average crossing rate is about 800 a week, so this will need to go up by a sizeable factor for that message to start seeping through to people trying to make that crossing,” Powell added.
The aim will be to make asylum seekers believe the “risk of going back to France is so big that they shouldn’t bother parting with their cash and paying smugglers” to make the crossing.
Read more:
What is the UK-France migrant returns deal?
Clampdown on social media ads for Channel crossings unveiled
Migrants in Dunkirk, France, preparing to cross the English Channel.
The Conservatives have branded the agreement a “surrender deal” and said it will make “no difference whatsoever”.
Under the terms of the agreement, adults arriving on small boats will face being returned to France if their asylum claim is inadmissible.
In exchange, the same number of people will be able to come to the UK on a new legal route, provided they have not attempted a crossing before and subject to stringent documentation and security checks.
The pilot scheme is set to run until June 2026, pending a longer-term agreement.
Home Secretary Yvette Cooper will face questions on the agreement on Sky News Breakfast this morning.
US Representative Dina Titus asked the CFTC to investigate Brian Quintenz, US President Donald Trump’s pick to run the agency, over his ties to Kalshi.
The CFTC is seeking feedback on how to more effectively regulate spot crypto trading as it moves to implement recommendations from the Trump administration.
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