European Union Strengthens MiCA with Delegated Regulations
On June 10, 2025, the European Commission adopted three Delegated Regulations under the Markets in Crypto-Assets Regulation (MiCA). Targeting conflicts-of-interest procedures, record-keeping for all crypto-asset services, and mandatory disclosures by service providers. These rules, effective June 30, aim to enhance governance standards, audit trails, and market integrity across the EU.
FATF Updates the “Travel Rule” for VASPs
In 2025’s second quarter, the Financial Action Task Force finalized revisions to its Travel Rule guidance, requiring Virtual Asset Service Providers (VASPs) to share originator and beneficiary information for transfers above de minimis thresholds. These thresholds allow transactions under a determined cost to cross international borders duty-free.
The update clarifies that exchanges, custodians, and Decentralized Finance intermediaries qualify as “financial institutions” and introduces interoperability standards for cross-border data exchange. These measures align virtual-asset requirements with those governing fiat settlements, reducing regulatory arbitrage (FATF, 2025). The Federal Deposit Insurance Corporation enforces virtual-asset requirements and fiat settlements through its Anti-Money Laundering (AML) and Combating the Financing of Terrorism (CFT) regulations.
Global Market Impact
Heightened compliance costs under MiCA and FATF’s Travel Rule will drive consolidation among smaller VASPs, while larger exchanges gain dominance. Harmonized AML/CFT standards enhance cross-border transaction certainty but introduce friction in low-value transfers.
Looking Ahead
As regulators strive to balance investor protection, market stability, and innovation, industry participants must invest in cyber-resilience and adapt to evolving compliance demands. The coming months will reveal whether harmonized standards foster sustainable growth or unintentionally stifle agile, open-source development.
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