ESMA Alert: MiCA Does Not Fully Protect the Financial Stability of Europe
The European Securities and Markets Authority (ESMA) issued an alert on April 9, 2025, stating that, despite the MiCA Regulation (Markets in Crypto-Assets) being in effect, the crypto market still poses significant risks to the financial stability of the European Union. The growing interconnection between crypto assets and the traditional financial system, such as the $94 billion in inflows into Bitcoin ETFs in the U.S. since January, can amplify price shocks, such as the collapse of FTX in 2022, which wiped out 30% of the crypto market value in two weeks. ESMA highlighted extreme volatility and institutional exposure as concerns, suggesting that more regulations may be necessary.
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