The European Securities and Markets Authority (ESMA) has called on EU lawmakers to tighten cryptocurrency regulations by requiring external cybersecurity audits for companies in the sector, the Financial Times reported on October 16. Ta.
The advisory comes as the cryptocurrency industry faces an alarming increase in cyber-attacks, putting consumer protection at risk. This is part of the proposed amendments to the future regulatory regime.
Mandatory audit
In its draft amendments to the Cryptocurrency Market Regulation (MiCA), which are expected to come into full force in December 2024, ESMA is advocating for stronger measures to protect crypto platforms.
The centerpiece of the proposal is to require companies to undergo third-party audits to assess and address potential cybersecurity vulnerabilities. ESMA's complaint highlights the need for stricter safeguards as cybercriminals increasingly target this sector.
ESMA argued that action is urgent, citing data showing that more than $1.5 billion was stolen from crypto platforms in the first half of 2024, an 84% increase compared to the same period in 2023.
Recent incidents such as the $52 million breach of Singapore-based exchange BingX in September and the $235 million hack of India's WazirX in July have further highlighted the risks facing the industry.
push back
MiCA has already introduced licensing requirements and anti-money laundering protocols, but ESMA's push for mandatory audits has met with some resistance.
The EC expressed concern that this proposal could go beyond the intended scope of MiCA. However, some regulators and industry observers argue that the increasing scale and sophistication of cyberattacks warrants additional oversight measures.
Calls for stronger cybersecurity regulations are not limited to Europe. A recent report from the European Parliamentary Research Service (EPRS) highlights the need for greater oversight of cryptocurrency operations outside the EU, particularly in regions with less coherent regulatory frameworks such as the US.
As the MiCA regulation nears full implementation, it remains to be seen whether the EU will accept ESMA's proposed cybersecurity audit obligations. Nevertheless, the push for stricter security protocols supports broader global efforts to strengthen the cryptocurrency industry's resilience to cyber threats and ensure consumer protection in an increasingly volatile market. It is reflected.
