The European Union bill aiming to regulate cryptocurrencies could result in crypto influencers being charged with market manipulation if they fail to disclose potential conflicts of interest.
The Markets in Crypto Assets (MiCA) bill, which has been approved by the European Parliament Committee on Economic and Monetary Affairs on Oct. 10, is expected to be legislated after a few more hurdles.
Patrick Hansen, stablecoin issuer Circle’s director of EU strategy and policy, has been closely following the passage of the bill and brought attention to a section in a Nov. 1 tweet that referred to public comments made without proper disclosure.
Crypto influencers beware: Commenting on crypto assets in (social) media without disclosure and profiting from the effects of that will be considered market manipulation in the EU once MiCA is in force.@zachxbt pic.twitter.com/BflVXPazjS
— Patrick Hansen (@paddi_hansen) November 1, 2022
The section Hansen highlighted reads that voicing opinions on crypto-assets after taking out positions on them and not disclosing that conflict of interest effectively could be regarded as market manipulation.
The section is part of measures included within the MiCA bill aiming to “prevent insider dealing, unlawful disclosure of inside information and market manipulation related to crypto-assets, in order to ensure the integrity of crypto-asset markets.”
Related: Saying ‘not financial advice’ won’t keep you out of jail: Crypto lawyers
The passage has gained some interest from the crypto community, and a related post on Reddit’s cryptocurrency subreddit suggests that the community is supportive, with the thread's top comment stating:
“Shilling certain projects and never taking responsibility for the losses they inflict upon people. It's about time those influencers get what they deserve.”
Whilst MiCA is unlikely to be fully applicable until 2024, it seems very likely to pass, with Hansen even referring to it as a “pure formality” following the finalization of the text on Oct. 5.
7/ Afterward, the final texts will be voted once more - a pure formality at this point - in the Parliament's ECON committee, the Council, and finally in the Parliament's plenary.
— Patrick Hansen (@paddi_hansen) August 6, 2022
Based on similar financial legislation, this could happen between Dec 22 - Jan 23.
