European Crypto Regulation Set Privacy Limits At 1,000 EUR.

The long-awaited Markets in Crypto Assets (MiCA) bill has finally seen a successful conclusion to the negotiations that were taking place inside the EU’s Economic and Monetary Affairs Committee.

The MiCA will work toward the implementation of supervisory regulations, consumer protections, and environmental safeguards, as well as the establishment of laws governing how cryptocurrencies and digital assets should be handled.

The new legislative framework, which has been the subject of controversy from its start in 2020, addresses the transparency, disclosure, authorization, and oversight of service provider transactions and tries to establish a uniform approach throughout all 27 member states.

MiCA aspires to improve financial stability and investor safety in Europe by mandating that all bitcoin wallets complete KYC processes, among other regulations.

The European Securities and Markets Authority (ESMA) will be granted the authority to prohibit or limit crypto platforms if it is determined that they do not adequately safeguard investors or endanger market integrity or financial stability.

Transfers between cryptocurrency exchanges and un-hosted wallets owned by individuals will be required to be reported if the amount exceeds 1,000 euros. This is a contentious issue for cryptocurrency enthusiasts, as they frequently trade digital currencies in order to maintain their privacy.

As the Ukraine-Russia crisis rages, the new framework seeks to decrease anonymity in an effort to combat money laundering and sanctions evasion.

However, many EU nations had already implemented laws regulating various areas of the crypto sector prior to the introduction of MiCA. For example, Germany is one of the nations that has been the most aggressive in terms of the regulation of virtual currencies.

Companies that keep crypto assets or assist trade of crypto assets need to apply for special licenses under German banking legislation. This requirement was implemented with the help of the EU’s anti-money laundering regulation from 2022.

The German financial regulator BaFin said that its regulatory framework was mainly comparable to that of MiCA. However, to date, BaFin has only issued licenses to a total of four different FinTech companies and none to conventional banking institutions.

Crypto broker firm Voyager Digital is about to sink with billions of dollars of investor funds.

A few days ago, Voyager Digital, a crypto brokerage firm, halted trading, and all transactions on its platform – both deposits and withdrawals. This came after the crypto market went on a downward spirilla, forcing some companies to be liquidated. Today Voyager Digital is filing Chapter 11 bankruptcy in New York, a move that could see over 100,000 investors lose their funds. Voyger Would Be represented by Kirkland and Ellis LLP.

According to Investopedia: “Chapter 11 is a form of bankruptcy that involves a reorganization of a debtor’s business affairs, debts, and assets, and for that reason is known as “reorganization” bankruptcy. Chapter 11 is the most complex form of a bankruptcy proceeding. A Chapter 11 bankruptcy allows a company to stay in business and restructure its obligations.”

Assets Vs Liabilities

Apparently, the firm holds assets worth between $1 billion and $10 billion. Interestingly, it owes liabilities amounting to the same range. That’s according to a petition filed. In the petition, the firm seeks legal rights to go bankrupt, a position that could greatly disadvantage its creditors. Kirkland and Ellis LLP is the name of the legal firm representing the crypto broker in the petition – according to court documents.

No Operations

A few days ago, the crypto firm resulted to suspending all trading, a move that followed a default notice in which the firm explained to a large creditor, Three Arrows, that it was unable to repay its loans due to deteriorating market conditions.

Granted, Voyager and Three Arrows aren’t the only crypto-related firms to feel the pinch of the mega fall of crypto prices over the last month. Another company, named Celsius, also went down in liquidation.

Is The Market Doomed?

There has been a lot of talk about the current crypto winter lasting for months. Some even say it could last a few years before things can go back to normal. However, the crypto market is known for its extreme volatility, especially at a time when the world is about to enter a severe period of economic recession. It remains to be seen whether the crypto market will hold up as the alternative to fiat inflation.

CNBC host Jim Cramer expects more pain in the crypto markets.

Mad Money TV host Jim Cramer on CNBC Squawk Box on Tuesday has taken a swipe at crypto, saying there is no real value in the markets; Cramer expects the current downturn to continue.

“Crypto does seem to be imploding. When it goes from $3 trillion to $1 trillion, why should it stop at $1 trillion? There’s no real value there,” said Cramer adding, “How many companies can Sam Bankman-Fried save?”

"Crypto really does seem to be imploding. Went from $3 trillion to $1 trillion. Why should it stop at $1 trillion? There's no real value there," says @jimcramer on #crypto. "What an awful asset. NFTs sold to you. Made up." pic.twitter.com/09e5ST8q0N

— Squawk Box (@SquawkCNBC) July 5, 2022

Cramer’s comments come from a problematic eight months for crypto markets that have seen Bitcoin drop over 70% from its highs, with almost $2 trillion wiped off the total market cap. 

As the market struggles, so have various crypto companies, including exchanges, miners, and DeFi lenders. Several DeFi lending platforms have revealed insolvency concerns in just over a month, with several others believed to be secretly insolvent. FTX’s Sam Bankman-Fried, as reported on numerous occasions, played a significant role in trying to bail out a number of these firms.

Notably, the TV personality and former hedge fund manager also took a swipe at NFTs, calling them “awful assets.” NFTs have also taken a hit, with floor prices dropping with the value of coins like Ethereum and Solana.

Community Feedback

Meanwhile, it is worth noting that the crypto community has strongly criticized Cramer’s negative commentary.

Aside from being very inconsistent in his support or criticism of the asset class, Cramer has built a reputation for making significantly wrong calls in both the crypto and stock markets. Notably, in April, the Mad Money host had predicted a 40% upward move for Ethereum, calling himself a “believer” and the asset “terrific.” Instead, however, Ethereum has since declined by over 60%.

Moreover, in June last year, the analyst confessed to selling all his Bitcoin over fears of the Chinese crypto ban tanking the market. Bitcoin made a run-up to $69k months later.

Deaton, granted amici status to represent XRP investors in Ripple V SEC case, said it is a good sign when CNBC makes negative comments about crypto.

“I’m sorry, Jim Cramer, but I have to agree that your comment is the most bullish sign Crypto has had in weeks.”

I’m sorry @jimcramer but I have to agree that your comment is the most bullish sign Crypto has had in weeks. https://t.co/iKT8his8wr

— John E Deaton (204.4K Followers Beware Imposters) (@JohnEDeaton1) July 5, 2022

Twitter user ‘Inverse Cramer ETF’ (@CramerTracker), who Tracks the stock and crypto recommendations of Jim Cramer so you can do the opposite, said:

“Jim when ETH was $3,000: “I LOVE IT, IT IS FANTASTIC”

Jim when ETH is $1,000: “THERE IS NO VALUE IN IT””

Jim when ETH was $3,000: “I LOVE IT, IT IS FANTASTIC”

Jim when ETH is $1,000: “THERE IS NO VALUE IN IT”

— Inverse Cramer ETF (Not Jim Cramer) (@CramerTracker) July 5, 2022

@LilMoonLambo said: “Jim Cramer, finally being bearish on crypto makes me feel like we’re about to start the biggest parabolic pump ever.”

@HBAcrypto said: “Jim Cramer says “crypto is imploding there’s no real value there” The bottom has been called *Pamp It*.”

Wall Street Silver says: “Crypto bottom is in.”

Notably, the crypto markets continue to move in a tight range. Bitcoin is hovering just above the $20k price point while Ethereum is just above the $1.1k price point, a 0.72% and 1.13% change in the last 24 hours, respectively. It is worth noting that mainstream media tagging the crypto markets dead have been good indicators of the bottom in the past.