Major crypto exchange OKX has selected Malta as its hub for Markets in Crypto-Assets (MiCA) compliance within the European Union.
In a Thursday press release, the firm said it chose Malta due to its reputation for high regulatory standards and its progressive approach to blockchain technology and cryptocurrencies.
Additionally, OKX already has existing personnel and infrastructure based in the Mediterranean island, making it a practical choice for establishing its MiCA hub.
OKX Plans to Offer Services for EU Users
With the implementation of the MiCA framework, OKX plans to offer spot trading services, including trading pairs with EUR and USDC, as well as buy, sell, convert, and staking services to eligible residents of the EU through its Malta entity.
Once fully effective on December 30 of this year, MiCA will enable crypto-asset exchanges to operate in multiple EU countries and provide their services across the entire region.
We’ve established our MiCA hub in Malta because it will enable us to provide world-class products to a diverse range of customers across Europe,” OKX Europe General Manager-Designate Erald Ghoos said.
Ghoos also highlighted the significance of the new regulatory standards in protecting users and supporting the sustainable development of the crypto industry, as well as OKX’s long-term investment and hiring plans in Europe.
We’re customer-focused & committed to regulation.
As part of this ethos, we’re excited to announce that Malta will be our MiCA base in EU.
Through MiCA, we look forward to serving millions of Europeans under one regulatory framework.
More: https://t.co/m4KAzdiirp pic.twitter.com/jbOusgoA06
— OKX (@okx) July 18, 2024
OKX’s local entity, Okcoin Europe Ltd, has held a Virtual Financial Assets Service Provider License from the Malta Financial Services Authority since 2021.
Crypto Firms Prepare for MiCA
MiCA, the Markets in Crypto Assets framework, is a comprehensive regulatory framework established by the European Union to create consistency in crypto regulation among its member states.
It was approved by the European Parliament in April 2023, and its rules are being implemented in stages.
As part of the MiCA framework, stablecoins issued within the region are subject to increased regulatory requirements.
Various provisions, including those for stablecoins, are being phased in gradually, with full compliance expected by the end of this year.
Starting from June 30, stablecoin issuers were required to comply with specific MiCA requirements.
Circle, the issuer of USDC, became the first global stablecoin firm to achieve compliance with MiCA on July 1.
Despite the excitement around MiCA, some industry players have expressed concerns.
Tether CEO Paolo Ardoino criticized MiCA’s complexity and potential risks following a delisting announcement of USDT from Bitstamp, suggesting it could complicate operations for stablecoin issuers.
Binance has also adjusted its approach, limiting access to unauthorized stablecoins in Europe, though not delisting them entirely.
Furthermore, implementing the MiCA regulatory framework has presented challenges for blockchain companies and decentralized finance (DeFi) protocols.
DeFi protocols are required to either achieve full decentralization or comply with the Anti-Money Laundering (AML) and Know Your Customer (KYC) regulations outlined in the MiCA framework.
While fully decentralized networks are exempt from reporting obligations under MiCA, protocols that employ foundations and intermediaries to facilitate decentralized communities may struggle to meet MiCA’s criteria for sufficient decentralization.
Consequently, these DeFi protocols must choose between achieving complete decentralization or accepting the necessity for users to provide verification data.
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