NFT Collections Will Be Regulated by New EU Law Like Cryptocurrencies

On August 2, European Union (EU) Advisor Peter Kerstens provided fresh perspectives on the EU's efforts to establish comprehensive regulatory frameworks in the crypto and NFT sectors during a panel at Korea Blockchain Week. NFT collections will be treated similarly to cryptocurrencies under the Markets in Crypto-Assets (MiCA) law, claims Kerstens, according to CoinDesk.

As a result of this new classification, EU residents who want to sell an NFT collection will be considered crypto-asset service providers (CASPs) and must obtain express permission from the EU before providing their services (or goods) to the general market. According to a press release, the EU wants to use these measures to "protect investors and safeguard financial stability, while permitting innovation and encouraging the attractiveness of the crypto-asset sector." This procedure is anticipated to take one to three months, with larger CASPs being required to give regular reports on their operations to the European Securities and Markets Authority (ESMA).

The EU also intends to reduce the use of crypto assets for money laundering and other illegal activities by taking a tough approach against NFTs. The EU will demand that anyone starting an NFT collection within its borders submit a white paper describing the NFT's protocol as part of this new categorization. According to CoinDesk's story, Kerstens also made it plain that making extravagant claims about the potential value of any particular NFT project is strictly prohibited. The EU wants to set the groundwork for making would-be rug pullers legally liable for their actions through these measures.

On the opposite side of the Atlantic, the U.S. has focused a lot of its efforts on regulating the cryptocurrency and NFT industries because bad actors are increasingly leveraging developing blockchain technologies to execute large-scale white-collar crimes. The creation of dedicated cybercrime units inside organizations like the IRS and FBI, along with the recent insider trading charges against former Coinbase and OpenSea workers, have been key to the development of these initial steps in Web3 regulation in the United States.

It is unclear whether approach will be more successful in the long run, despite both parties making incremental progress in regulating the hitherto anarchic area of NFTs and crypto.

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