REGULATION | the European Central Bank Supports Plan to Supervise Major Crypto Firms Under EU Fin...
The European Central Bank (ECB) has backed a European Union (EU) proposal to centralize oversight of major crypto firms under the bloc’s markets regulator, marking a potential shift toward tighter supervision.
In a published opinion, the ECB said it “fully supports” plans to place systemically important crypto-asset service providers and large trading platforms under the authority of the European Securities and Markets Authority (ESMA), rather than national regulators.
The move would represent the most significant overhaul of EU crypto supervision since the Markets in Crypto-Assets (MiCA) framework took effect, which currently allows firms licensed in one member state to operate across the bloc.
European Union (EU) Agree on ‘Landmark Rules to End Crypto Wild West’
The rules, referred to as ‘Markets in Crypto Assets Regulation (MiCA),’ will introduce a licensing regime for crypto services, including wallet providers and exchanges across the EU.https://t.co/bJhwJDRNQ1 pic.twitter.com/nHewXjDIoa
— BitKE (@BitcoinKE) October 9, 2022
The ECB said a centralized model would help reduce regulatory fragmentation and strengthen financial stability as crypto firms become more interconnected with the traditional financial system.
However, the central bank cautioned that ESMA would need additional staffing and funding to handle its expanded role and called for a gradual transition from national supervision to avoid market disruption.
The proposal, which is non-binding but influential, will now be negotiated by EU member states and the European Parliament. Some countries have already expressed concerns that the shift may be premature given MiCA only recently came into force.
STABLECOINS | The European Central Bank Warns Increased Stablecoin Use May Weaken Monetary Policy Flows
Stay tuned to BitKE for updates into the evolving regulatory space globally.
REGULATION | Prediction Markets Fall Under Our Federal Mandate, Says Chairman, CFTC
Michael Selig, Chair of the U.S. Commodity Futures Trading Commission (CFTC), is pushing for the agency to retain exclusive authority over prediction markets intensifying a growing clash with U.S. states seeking to regulate the sector.
Selig argues that event-based contracts, which allow traders to bet on outcomes such as elections, sports or economic indicators, fall squarely under the CFTC’s mandate as derivatives products, rather than gambling, and should therefore be overseen at the federal level.
The stance comes as several states, including Arizona, Illinois and Nevada, attempt to classify such platforms as illegal betting operations, triggering legal disputes over jurisdiction. Federal courts have increasingly sided with the CFTC in recent cases reinforcing the regulator’s position that state-level enforcement risks undermining a unified national framework.
Prediction markets, offered by platforms such as Polymarket and Kalshi, have surged in popularity, drawing both retail and institutional interest, but also scrutiny over risks such as insider trading and market manipulation.
Selig has emphasized the need for clear federal rules to govern the fast-growing sector warning that regulatory fragmentation could push innovation offshore while weakening oversight.
The dispute is expected to shape the future of prediction markets in the United States with legal battles likely to determine whether federal regulators or state authorities ultimately control the emerging industry.
REGULATION | Insider Trading Risks Escalate on Prediction Markets as Enforcement Intensifies
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DeFi | Velora (ParaSwap) Becomes Latest DAO to Wind Down Operations
Velora, a cross-chain decentralized exchange aggregator formerly known as ParaSwap, has voted to wind down its decentralized autonomous organization (DAO) and transfer control to its development firm, Laita Labs, following a governance vote.
The proposal, dubbed PIP-77, passed with 65.8% support, ending the DAO’s operational role and shifting all protocol management, infrastructure, and revenue to Laita Labs.
As part of the transition, roughly $415,000 in treasury funds will be transferred to the company to cover outstanding costs while staking programs will be shut down and users allowed to withdraw immediately.
The move also eliminates fee-sharing with token holders, turning the VLR token into a governance-only asset focused on structural decisions such as upgrades or chain expansions.
Laita Labs said the change reflects the project’s current reality, with governance participation declining and core operations already handled by the development team, though some community members opposed the shift, citing reduced token value alignment.
The latest Velora DAO wind down comes as DAOs vs. Labs governance models come under pressure across the DeFi ecosystem.
Key examples include:
The AAVE DAO vs AAVE Labs months-long dispute over free distribution between token holders and AAVE Labs.
The Balancer DAO shutdown due to unsustainability.
The Tally DAO governance platform shutdown due to regulatory pressure.
DeFi | Why this Primary Risk Management Provider is Exiting the Largest DeFi Lending Protocol
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