The EU’s MiCA regulation increases supervision over the global crypto market
After years of uncertainty, many countries are finally implementing new regulations designed to regulate and improve the supervision over the global crypto market. These regulations are changing the rules of the game for investors, trading platforms and crypto companies. Following are the key changes around the world:
The European Union launched MiCA (Markets in Crypto-Assets) Regulation, which provides a clear and uniform regulatory framework for CASPs (crypto-asset service-providers) and is considered a global model for crypto regulation. Since December 30, 2024, all companies operating in the European crypto market have been obligated to comply with the new regulation, which includes requirements pertaining to consumer protection, the prevention of market manipulation and compliance with financial stability standards.
Notwithstanding the intention of creating a uniform framework, countries like France are taking action to become crypto hubs by creating streamlined crypto licensing tracks in their jurisdictions. To ensure consistent implementation of the regulation, the European Securities and Markets Authority (ESMA) published guidance clarifying the conditions for classifying crypto-assets as financial instruments and specifying trading platforms’ obligations.
Google adapted its advertising policy to the MiCA Regulation in the European Union – Google has also announced that it revised its advertising policy to comply with the MiCA Regulation’s requirements in the European Union. Advertisers looking to advertise crypto exchanges and digital wallets on Google’s platforms will be obligated to comply with the more stringent rules.
According to Google’s updated policy, a precondition for advertising these services will be a valid CASP license issued by the competent authority in the relevant company’s country, as required under the MiCA Regulation. Advertisers will also have to comply with all local statutory requirements, in addition to complying with the MiCA Regulation, and obtain specific certification from Google itself.
In order to abide by the transitional arrangements prescribed in each country, and to increase transparency and credibility in advertising of crypto products in the European Union, Google’s more stringent policy states that it will recognize existing local licenses in particular countries (Finland, France and Germany) for defined periods ranging between mid-2025 and the end of 2026. However, after these periods, Google will only recognize advertisers holding MiCA licenses. Google also clarified that policy violations will not result in immediate suspension and that it will issue warnings at least seven days in advance before taking measures.
The United States IRS has finalized new reporting obligations for crypto brokers, including DeFi platforms.
Up until recently, crypto trading platforms and other brokers were not obligated to report their users’ transactions or to issue tax forms to them. The IRS (Internal Revenue Service) claimed that this situation caused significant disparities in the enforcement of tax laws on crypto-assets and made the market vulnerable to incidents of tax evasion.
Consequently, in order to increase transparency and prevent tax evasion, since the beginning of 2025, crypto brokers have been obligated to report U.S. investors’ transactions and to issue Form 1099 to them, similarly to the obligations imposed on traditional brokers and securities traders pursuant to the IIJA (Infrastructure and Investment Jobs Act).
Although the US Treasury Department claims that this is not a new tax, but rather another step towards advancing regulatory fairness, the new rules have aroused opposition from industry giants. Three of the largest associations in the United States (the Blockchain Association, the DeFi Education Fund and the Texas Blockchain Council) filed a lawsuit and a motion for an injunction against the new rules, alleging that they were published summarily without proper procedure during the final days of the Biden Administration, and that they change the definition of “broker” to unlawfully apply to software developers, who are not in a position which enable them to comply with the regulatory requirements.
The United Kingdom has enhanced supervision over the crypto market – the UK’s Financial Conduct Authority (FCA) is advancing new regulation designed to increase transparency and prevent market manipulation. According to its recent discussion paper: “Regulating Crypto-assets – Admissions and Disclosures and Market Abuse Regime for Crypto-assets,” crypto trading platforms may be obligated to comply with strict disclosure requirements and provide clear information about the level of risk in their offered products.
The FCA is also proposing to impose the Market Abuse Regulation (MAR) on the crypto sector too, so that crypto trading platforms and other brokers will be obligated to implement systems and controls to detect violations in the market and to report suspected violations. The final legislation is still awaiting approval and is expected to come into effect during 2026.
China is imposing strict supervision over foreign currency and crypto transactions – after the UN Office on Drugs and Crime (UNODC) published a report in January 2024 concerning criminal organizations in east and southeast Asia using cryptocurrency for money laundering purposes, China’s State Administration of Foreign Exchange (SAFE) issued new regulations designed to tighten its supervision over transactions in foreign currency, including cryptocurrencies. The new regulations obligate Chinese banks to identify and monitor suspicious activities in order to prevent Chinese underground banking, Illegal gambling and money laundering.
China has banned crypto trading since 2017, however black-market trading continues despite the prohibition. The new regulations reduce the possibility of Chinese bank accounts being used to purchase crypto in yuan.
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Advs. Andrey Yanai and Avihai Tal from the firm’s regulations department.
Barnea Jaffa Lande’s regulation department is one of the leaders in its field in Israel and provides comprehensive advice on a variety of regulatory aspects tangential to the business activities of the firm’s clients. Local and international corporations, investment funds, financial institutions, technology companies and industrial companies are just some of the sectors that avail themselves of our expertise in contending with rapidly evolving, complex regulations.