EU Watchdog Suggests Limiting Leverage for Crypto Trading

In a statement on Thursday, May 25, the EU watchdog said that it is working to stop shocks that would jeopardize the financial stability elsewhere. The European Systemic Risk Board made several recommendations ranging from asking all crypto firms to submit regular reports as well as introducing specific rules for some of the biggest players in the space. In its report, the ESRB said:

advertisement

“Systemic risks could arise quickly and suddenly. If the rapid growth trends observed in recent years were to continue, crypto-assets could pose risks to financial stability.”

Thus, they have proposed a few changes to the recently passed MiCA regulations such as “introducing leverage limits for investment funds exposed to crypto-assets”. Additionally, the ESRB also called for limiting the crypto firm’s ability to lend tokens to its clients, which has been one of the popular ways of making high-leveraged bets. Furthermore, the ESRB asked for setting up high collateral requirements for distributed finance products and stablecoins.

EU And Its MiCA Laws

This development comes just 10 days after the EU Council approved the Markets in Crypto-Assets (MiCA) legislation. The member states of the EU and the European Parliament have collectively adopted MiCA rules which make sure that crypto businesses seek authorization from the EU to serve customers within the bloc.

Recommended Articles
ethereum price crypto news
Crypto Presale Projects For 2023 To Invest; Updated List
Must Read
crypto exchange affiliate programs
Best Crypto Exchange Affiliate Programs In 2023
Must Read
ethereum price crypto news
Top Crypto Marketing Firms / Agencies 2023; Here’s Best Picks [Updated]
Must Read
ethereum price crypto news
Crypto Telegram Channels List 2023 [Updated]
Must Read
ethereum price crypto news
Top 10 Web3 Games To Explore In 2023; Here List
Must Read

Additionally, these businesses should also comply with protections to prevent issues of money laundering or terror financing. The EU has come up with MiCA rules finally after a major shakeout in the crypto space and some high-profile collapses happening last year.

The recent recommendations from the ESRB are not bindings but rather shall inform the EU’s future work on the new versions of its crypto assets regulation (MiCA).

Comments

Post a Comment

Popular posts from this blog

XRP Futures Open Interest Surpass $1.1 Billion in 24 Hours

Image
XRP made notable strides in the crypto market, leading to substantial gains. Within the last 24 hours, open interest on futures contracts linked to XRP exceeded $1.1 billion. This achievement marked another milestone, surpassing the $1 billion mark set the previous week and establishing a new record high for the year. Open interest is the number of unsettled futures contracts. This has experienced a 21% increase since earlier this week. Among these positions, the largest share of about $459 million is held on the crypto exchange Binance. Bybit was next in line at $304 million and Bitget followed suit with $263 million. Source A higher open interest indicates a surge in investments or bets on various assets. This signifies the influx of new funds into the financial market. Typically, this suggested an expectation for the current trend to persist. In parallel, the price of XRP experienced an astonishing surge of 67.42% in the past few days. At press time, the altcoin was trad...
Read more

Analyst Predicts Trends Using Whales’ Onchain Borrowing Data

Traders can tell when whales go long by monitoring the Aave/Compound stablecoin borrowing pattern, according to The Data Nerd, an onchain data analyst. According to the analyst, four whales have used this strategy in the last 24 hours. Quick tip: Monitoring Aave/Compound stablecoin borrow can tell you when whales go long. We have created a @DuneAnalytics dashboard for you to easily follow this behavior. So far we have noticed 4 whales using this strategy since yesterday pic.twitter.com/RTwZ8LyWCL — The Data Nerd (@OnchainDataNerd) April 23, 2023 In a Twitter thread, The Data Nerd explained that similar to using margin or leverage on centralized exchanges (CEX), whales would go long by borrowing stablecoin using Aave or CompoundFinance. They would follow this up by using the amount to buy assets on decentralized exchanges (DEX) or to deposit to CEX. They repeat the cycle and use it as a profitable system in the cryptocurrency market. By monitoring the action of w...
Read more

US prosecutors outline jury instructions for SBF’s trial

US prosecutors have submitted their proposed instructions to the jury for the upcoming trial of FTX co-founder Sam Bankman-Fried, set to begin in October. The detailed 100-page filing, dated Aug. 21, outlines how the prosecutors wish Judge Lewis Kaplan to guide the jury in Bankman-Fried’s case. The instructions are based on previous guidance the New York district judge has provided in other cases. Bankman-Fried faces seven charges, including fraud, money laundering conspiracy, wire fraud, commodities fraud, and securities fraud. The filing breaks down each charge, suggesting how Judge Kaplan should present the allegations, the burden of proof required for a guilty verdict, and the evidence related to each charge. The document also includes proposed guidelines for how the jury should assess the evidence, deliberate, and conclude each count. While such proposals are standard in criminal trial s, the final decision on jury instructions rests with Judge Kaplan. The former FTX c...
Read more