In less than a week, the EU will put into effect legislation that will dramatically change the landscape of cryptocurrency.

The purpose of these new laws is to protect consumers from scams and to make the market stabler. As positive as that sounds, many crypto exchange platforms are simply not prepared for the new legislation. They have not received government approvals in cases where those are required and have not changed the way they do business to fall in line with the regulations.

The EU market will soon require wallet providers and exchanges to apply for licenses if they are going to continue operating in that part of the world. Brussels will be the first country to put these laws into effect, and the government there has proudly announced their first-place status.

The new law is called MiCA, or Markets in Crypto Assets, and it could cause drastic changes for the cryptocurrency industry.

How Will the Legislation Affect the Industry?

We expect major changes to start happening soon, especially in the European space. It remains to be seen how quickly and how severely the government there will crack down on violators, but you can be sure that once they do, many platforms and wallet providers will start to toe the line.

We could see a shakeup in the industry that will have ripple effects across the world. Many exchanges could be penalized with fines or removal from various European countries. This could greatly disrupt crypto trade or force it to move to other countries.

While the goal of the EU with this law is to create stability and oversight for the industry, we could see a temporary state of “wild west” behavior develop as exchanges find ways to skirt the laws and struggle to conform to the new regulations.  

As other parts of the world see how the laws are affecting the industry, they may adopt similar rules, which could cause further division and changes to the industry that would be difficult for investors and exchanges to keep up with. The fear from some corners of the industry is that the crypto business could take a major hit that will drastically reduce the number of investors.