The European Securities and Markets Authority (ESMA) has explicitly identified the Maximum Extractable Value (MEV) as a clear example of illegal market abuse in its proposed technical standards for the Markets in Crypto-Assets (MiCA) Regulation.
Patrick Hansen, a prominent commentator on crypto regulation, recently highlighted this development on X, noting the significant implications it will have for the crypto industry.
MEV Regulation
According to Patrick Hansen, a crypto regulation commentator, on social media, the European Securities and Markets Authority (ESMA) draft explicitly mentions the maximum extractable value (MEV) issue. The draft states that miners or validators use their authority to arbitrarily reorder transactions, preemptively execute certain transactions and profit from them, and this behavior clearly constitutes a market abuse.
Hansen pointed out that according to ESMA's draft, almost all cryptocurrency businesses regulated in the EU, including exchanges and brokers, must use detailed "suspicious transaction or order reports" (STORs) to monitor and report MEV incidents. He mentioned that the STOR template provided by ESMA alone is very detailed and is six pages long.
Hansen expressed concerns about ESMA’s proposed MEV detection and reporting standards, arguing that the feasibility of requiring reporting of every MEV instance is questionable. He pointed out that in the cryptocurrency market, due to the complexity and frequent occurrence of MEV events, requiring comprehensive reporting may pose administrative challenges.
In addition, ESMA's draft standard recommends a collaborative enforcement approach, urging authorities within and outside the EU to cooperate in sanctioning market abuse. This means that participants in MEVs may face investigations and enforcement actions not only from EU regulators, but also from international authorities.
Consultation Deadline
ESMA's consultation is part of its ongoing work on the implementation of MiCA, the Markets in Crypto-Assets regulation, which aims to strengthen the integrity of the market and protect investors' interests through a series of technical standards. ESMA's focus on MEV (Maximum Extractable Value) shows the EU's determination and efforts to address the complex market manipulation issues that have emerged in the rapidly developing cryptocurrency sector. In this way, the EU hopes to ensure the healthy development of the cryptocurrency market and protect investors from unfair trading practices.
Hansen stressed the importance of stakeholder involvement in the consultation process, noting that feedback from those directly involved in MEV and other crypto activities is critical to developing effective and practical regulatory measures.
Hansen stressed the importance of stakeholders' participation in the consultation process, and he believed that the feedback provided by those who are directly involved in MEV and other cryptocurrency activities is critical to developing effective and practical regulatory measures. This means that in order to ensure that regulatory rules can meet the actual needs of the market and solve specific problems, regulators need to listen to and consider the opinions and suggestions from market participants. Through this inclusive consultation process, the quality of regulatory decisions can be improved to ensure that the final regulatory framework can both promote the healthy development of the market and protect the interests of investors.
ESMA has set a deadline of June 25 for stakeholders to submit their comments and suggestions on the draft standards. This deadline provides a clear time frame for all individuals and institutions involved in the cryptocurrency market to ensure that their voices are heard and to provide feedback on regulatory measures that may affect their business. By setting such a deadline, ESMA encourages open and transparent dialogue to promote the development of a comprehensive and balanced regulatory environment.
Once these standards are finalized, they are expected to have a profound impact on the EU's cryptocurrency regulatory environment and are likely to serve as a reference or precedent for other countries and regions in formulating similar regulatory measures. This suggests that the measures taken by the EU in cryptocurrency regulation not only have an important impact on the internal market, but may also have a guiding role in global cryptocurrency regulatory trends and practices. In this way, the EU may promote higher standards of market integrity and investor protection worldwide.
Conclusion:
With the rapid development of the cryptocurrency market, regulators such as ESMA are facing unprecedented challenges. By clearly defining MEV as market abuse and proposing strict regulatory standards, the EU is working to establish a clear regulatory framework for the cryptocurrency market.
This move not only provides transparency and integrity to the EU internal market, but also serves as a model for regulatory practices in other jurisdictions around the world. Active participation and feedback from stakeholders are essential to ensure the effectiveness and practicality of regulatory measures.
As the June 25 consultation deadline approaches, we look forward to seeing how these standards shape the regulatory landscape for cryptocurrencies in the EU and around the world. #欧盟加密货币 #监管 #ESMA #MEV
