TechFlow reported that venture capital firm Paradigm submitted a comment letter in response to the European Securities and Markets Authority (ESMA)'s consultation paper on strengthening the prevention of abuse in the crypto asset market. ESMA's document involves measures to implement the Crypto Asset Markets Act (MiCA), the first of which will take effect on June 30.
Paradigm primarily objects to ESMA’s stance on “market abuse, such as the well-known Maximum Extractable Value (MEV)”. Paradigm points out that there is currently no universally accepted way to determine which MEV-related activities are harmful or suspicious, requiring the ecosystem to monitor and prevent behaviors that are inherently subjective, which will lead to inconsistent application and unintended consequences. Paradigm emphasizes that a clearer understanding of MEV is needed, and further states that regulating the microstructure of the base layer blockchain is inherently wrong.
