European Union

EU Commission targets X over ‘dissemination of illegal content’

X owner Elon Musk told advertisers to “go f— yourself” on Nov. 29 after many left the social media platform in response to antisemitic content and a report on hate speech.

The European Commission said it had opened formal proceedings to investigate X — formerly Twitter — over content related to the terrorist group Hamas’ attacks against Israel.

In a Dec. 18 notice, the commission said it planned to assess whether X violated the Digital Services Act for its response to misinformation and illegal content on the platform. According to the government body, X was under investigation for the effectiveness of its Community Notes — comments added to specific tweets aimed at providing context — as well as policies “mitigating risks to civic discourse and electoral processes.”

“The opening of formal proceedings empowers the Commission to take further enforcement steps, such as interim measures, and non-compliance decisions,” said the notice. “The Commission is also empowered to accept any commitment made by X to remedy on the matters subject to the proceeding.”

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CZ must stay, Do Kwon to be extradited: Law Decoded

A Seattle district court ruled out CZ’s departure to the UAE, and the Montenegrin justice minister plans to grant the United States request for Do Kwon’s extradition.

Binance founder Changpeng “CZ” Zhao has been ordered to stay in the United States until his sentencing in February 2024, with a federal judge determining there’s too much of a flight risk if the former exchange CEO is allowed to return to the United Arab Emirates. Seattle district court Judge Richard Jones wrote in his order:

“The defendant has enormous wealth and property abroad, and no ties to the United States […] His family resides in the UAE and it appears that he has favored status in the UAE. Under these circumstances, the Court finds that the defendant has not established by clear and convincing evidence that he is not likely to flee if he returns to the UAE.”

Jones accepted Zhao’s guilty plea to one count of Bank Secrecy Act violations, which the Binance founder submitted over two weeks ago on Nov. 21 alongside a $4.3 billion settlement with U.S. agencies. Now, the ex-CEO of Binance faces up to 18 months in prison.

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French startup Mistral AI closes $415M funding round

The French artificial intelligence startup Mistral AI closed a funding round worth around $415 million as it strives to be the EU’s rival to OpenAI.

French artificial intelligence (AI) startup Mistral AI has announced it raised €385 million ($415 million) in its latest funding round to develop its technology and open-source software.

Andreessen Horowitz and the company’s initial backers, Lightspeed Ventures, led the round, which closed on Dec. 11. This follows a previous funding round in June where Mistral raised $113 million in seed funding. The company is currently valued at around $2 billion.

Mistral AI focuses on open-source technology for generative AI tools, chatbot development and customizable features. It aims to make its products available to the general public in early 2024.

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EU officials reach ‘historic’ AI regulation deal

The agreement mandates models like ChatGPT and general AI to follow transparency rules before market entry.

The European Parliament and Council negotiators reached a provisional agreement on the rules governing the use of artificial intelligence (AI) on Friday, Dec 8.

The agreement covers the governmental use of AI in biometric surveillance, how to regulate AI systems such as ChatGPT, and the transparency rules to follow before market entry. This covers technical documents, adherence to European Union copyright and sharing training content summaries. 

The EU wants to be the first supranational authority with laws on AI, specifying how it is to be used beneficially while protecting against risks. The deal was struck following a nearly 24-hour debate on Dec. 8 and 15 hours of negotiations after that.

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Robinhood launches crypto trading services in Europe

All eligible customers in the EU region can access Robinhood for crypto trading services, with over 25 cryptocurrencies available for trade.

Trading and brokerage firm Robinhood announced the launch of its crypto services for all eligible European Union customers on Dec. 7. The platform will allow traders to buy and sell over 25 cryptocurrencies.

Robinhood’s entry into the European crypto market comes just a week after the firm launched its stock trading application in the United Kingdom.

Cointelegraph contacted Oliver McIntosh, senior product communications manager at Robinhood, to understand the firm’s crypto focus and expansion plans in Europe. Mcintosh said that the EU is the right market to anchor our international expansion plans, and Robinhood “welcomes the approach that the EU has taken in creating the world’s first comprehensive regime for crypto assets via the Market in Crypto-Assets Regulation (MiCA).”

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France’s 3rd-largest bank, Société Générale, launches euro-pegged stablecoin

The euro-pegged stablecoin will be the first of its kind in the region and will be available to the bank’s customer base for trading use.

Société Générale, France’s third-largest bank, has debuted its native euro-pegged stablecoin, making it one of the first European banking giants to venture into the stablecoin market.

The EUR CoinVertible (EURCV) stablecoin will debut on the Luxembourg-based Bitstamp crypto exchange, the Financial Times reported. EURCV will be fully backed by the euro, allowing bank customers to participate in the digital asset market. The asset will be available to a broad customer base and can be used for trading.

Jean-Marc Stenger, the CEO of Société Générale Forge, stated that the new stablecoin highlights the bank’s role in the evolving crypto domain and stressed the necessity for a stablecoin denominated in euro.

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Ukraine plans to adopt EU’s new cryptocurrency regulations

Immediately after passing the European Parliament, Ukrainian authorities announced plans to adopt the EU’s MiCA regulations on crypto assets.

Hot on the heels of the European Parliament passing the Markets in Crypto-Assets (MiCA) regulation, Ukrainian regulators have stated publicly that they will adopt the legislative package in their own country as well.

The deputy chairman of the Tax Committee of Ukraine, Yaroslav Zheleznyak, said on his Telegram channel on April 20, “We, along with colleagues from the NKCPFR [National Commission on Securities and the Stock Market] and other regulators, are already working on implementing some provisions of MiCA to make crypto assets legal in Ukraine.”

Yuriy Boyko, a member of the NKCPFR, said, “I am sure Ukraine will be one of the first countries to implement this regulation into national legislation.”

The introduction of MiCA marks a major advancement for the crypto industry within the European Union.

MiCA is the result of long efforts of European policymakers to introduce uniform regulations and create standardized rules for crypto assets across the EU, as crypto businesses are currently required to adhere to 27 distinct regulatory frameworks across EU member countries.

The implementation of MiCA is expected to enhance the competitiveness of startups in the EU, which could lead to a rise in their market share as compared to unregulated competitors.

Related: Ukraine’s central bank sees both promises and threats in Bitcoin

Despite the need for EU lawmakers to still conduct legal and linguistic checks for MiCA as well as publish the bill in the EU journal, different stakeholders in the crypto industry have reacted positively to the development.

Ukraine’s move to adopt EU regulations comes on the backdrop of the Eastern European country receiving candidate status to the EU in June 2022. Per the European Council, European regulators have “acknowledged the considerable efforts that Ukraine has demonstrated towards meeting the objectives underpinning its candidate status for EU membership.”

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Industry leaders and policymakers react to passage of MiCA in EU

Many lauded the bill’s approval, suggesting that its anticipated passage could leave the United States at a disadvantage for attracting crypto firms and investments.

Though a crypto-focused regulatory framework still needs approval from the European Council before final passage, many in the space have reacted positively to the Markets in Crypto Assets, or MiCA, bill moving forward.

On April 20, the European Parliament voted to pass MiCA after two delays starting in November 2022. The bill aims to create a consistent regulatory framework for crypto assets among the European Union member states.

Though EU lawmakers still need to conduct legal and linguistic checks for MiCA as well as publish the bill in the EU journal, the policy could go into effect as early as 2024, depending on the European Council vote. Many crypto industry leaders and policymakers largely lauded the bill’s approval.

Changpeng “CZ” Zhao, CEO of Binance, suggested he would begin implementing changes to the exchange in the next 12-to-18 months in order to be in compliance with the potential new framework. Others targeted the United States for seemingly falling behind in digital asset regulation — a move that could drive companies to the EU with the implementation of MiCA.

“Overall we think this is a pragmatic solution to the challenges we collectively face,” said CZ. “There are now clear rules of the game for crypto exchanges to operate in the EU.”

Prior to the European Parliament vote, EU Commissioner for Financial Stability Mairead McGuinness told lawmakers they were “ahead of many other jurisdictions” in regard to crypto regulation. More than 500 members of parliament ended up voting in favor of MiCA.

Related: Kraken receives virtual asset service provider authorization in Ireland ahead of MiCA vote

One of the key votes for the crypto framework followed a crypto market crash and the bankruptcies of high-profile firms that had many lawmakers across the globe calling for regulatory clarity. Christine Lagarde, president of the European Central Bank, also suggested that policymakers needed to implement a broader framework in response to the collapse of FTX, proposing a “MiCA II” in the future.

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What’s next for EU’s crypto industry as European Parliament passes MiCA?

What is the potential impact of MiCA on the EU crypto and blockchain market, and what other regulations can be expected for this rapidly evolving industry?

On April 20, the European Parliament voted to pass the Markets in Crypto-Assets (MiCA) regulation, the European Union’s main legislative proposal to oversee the crypto industry in its member countries. 

The MiCA regulation is a significant development for the crypto industry in the European Union. Prior to MiCA, crypto companies had to comply with 27 different regulatory frameworks across the EU member states, with Germany or France being costly and burdensome, for example.

Under MiCA, however, EU-wide regulations will apply, allowing companies to operate throughout the entire EU crypto market with a MiCA license granted in one country. This will increase the competitiveness of EU startups and may result in them gaining market share from unregulated competitors.

MiCA will increase the EU’s competitiveness

Moreover, MiCA could encourage more institutional adoption and activity in the EU crypto and blockchain market. Patrick Hansen, director of EU strategy and policy at stablecoin issuer Circle, told Cointelegraph that MiCA will enable European crypto firms to scale and grow faster, allowing licensed companies to offer their services throughout the world’s largest single market, with roughly 450 million people:

“The legal clarity will also foster innovation amongst financial institutions that have been previously hesitant to launch products and services due to regulatory uncertainty. Additionally, as MiCA is the first comprehensive regulatory framework for crypto assets from a major jurisdiction in the world, it is likely to attract considerable foreign capital and talent to the region.”

For Moritz Schildt, a board member of the Hanseatic Blockchain Institute and the German Blockchain Association, the biggest advantage of MiCA is that “it will come into force already this year,” giving the EU a chance to provide a unified regulatory framework for crypto assets and related providers.

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Creating a regulatory framework for a technology that sees new developments and outgrowths practically every month and evolves as dynamically as the tokenization of investment opportunities is “very challenging.”

“It should come as no surprise, therefore, that some regulations are not yet optimal and that questions about concrete applications remain unanswered,” Schildt said, adding that with MiCA, Europe has the opportunity to position itself “as a location for innovation and quality.”

Unregulated companies out of the EU crypto market

Peter Grosskopf, co-founder of decentralized finance (DeFi) project Unstoppable Finance, is also convinced that MiCA will benefit the EU crypto and blockchain market. First, companies from outside Europe will have to register with a company in the EU, so there is a “direct impact on job creation and tax payments.”

Second, many jurisdictions take an overly strict approach to regulating crypto. For example, “the U.S. does regulation by enforcement.” Compared with other regions, the EU will become “a safe space for the industry as a whole, and innovators from around the world will start to build their businesses here,” Grosskopf said.

Stefan Berger also noted that the United States is currently cracking down on the crypto sector. According to the German politician and European Union Parliament rapporteur for MiCA, the European crypto asset industry has regulatory clarity that the United States doesn’t, and it would be wise for U.S. lawmakers to take a cue from MiCA:

“For me, the biggest advantage is that we create trust, which is a crucial booster, especially for young technologies like blockchain. I expect regulation to become a global standard-setter over time. A global MiCA would be desirable at some point.”

NFT regulation unavoidable

Through MiCA, European policymakers are trying to create a reliable framework that builds trust through legal certainty. This includes a uniform classification of assets and the requirement for coin issuers to provide a white paper that discloses all relevant information about the coins, such as their energy consumption and environmental impact.

In addition, MiCA will ensure that every new token is reviewed for approval to check that the business model does not threaten the stability of the cryptocurrency, which creates more transparency for investors.

But the crypto and blockchain sector is constantly evolving. “Tokenization is not hype and will become an integral part of our lives and financial world,” said Berger. More and more business models are emerging based on nonfungible tokens (NFTs), for example, which have been largely exempt from MiCA. (The new regulation will only address crypto-asset service providers that offer services for NFTs).

But according to Berger, NFTs are next on the docket, with European lawmakers looking at what type of regulation would benefit the industry and consumers.

Schildt also expects further regulations on NFTs relatively soon. “We should reconsider the traditional classification of investment products.” According to the expert, in the future, investments “that were previously considered ‘art collections,’ we will also qualify as capital investments.”

DeFi is a hot topic in European policy making

Some aspects of MiCA have yet to be defined through upcoming technical standards and guidelines.

For example, what are the specific liquidity requirements for electronic money token reserves? EU regulators will develop these standards over the next 12 to 18 months, and “the practical success of MiCA will largely depend on this implementation work — also referred to as Level 2 legislation,” Circle’s Hansen said.

Hansen further noted that, beyond MiCA, EU institutions are finalizing a new Anti-Money Laundering (AML) rulebook that will be “critical for crypto firms.”

Another critical review is that of PSD2, the EU’s main payments directive, which will also significantly impact crypto firms.

And finally, in about 18 months, the European Commission will publish a detailed report on DeFi and may take further legislative steps to regulate the space. “Brussels prides itself on being a global regulatory leader, and MiCA is just the first of many steps to come,” said Hansen.

Unstoppable Finance’s Grosskopf also expects DeFi regulation to become a hot topic following the next round of elections in Europe, as MiCA will not apply to “crypto-asset services provided in a fully decentralised manner without any intermediary.”

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“I think it’s important to be proactive and start thinking about how to regulate DeFi as early as possible in order to influence the process,” he said, stating that the new AML regulation is currently under discussion and will most likely become a reality before MiCA.

Although it’s still unclear exactly how European lawmakers will regulate NFT and DeFi or whether there will be new requirements regarding smart contracts, the success of the first step toward regulation — MiCA — could provide a significant boost to both EU crypto businesses and the EU economy as a whole. However, whether this success is realized will depend on the practical implementation standards developed in the future.

EU legislators call for ‘safe’ AI as Google’s CEO cautions on rapid development

A group of EU politicians called for a united front in developing artificial intelligence while tech executives expressed concerns about its societal impacts.

A dozen European Union politicians have signed a letter calling for the “safe” development of artificial intelligence as Google’s CEO cautioned against releasing powerful AI tech before society has had a chance to adapt.

An April 16 open letter shared on Twitter by EU Parliament member Dragoș Tudorache called for a collaborative effort and a universal set of rules around the development of AI.

Tudorache, along with 11 other EU politicians named in the letter, asked the European Commission President Ursula von der Leyen and United States President Joe Biden to convene a summit on AI and to agree on a set of governing principles for the development, control and deployment of the tech.

“Recent advances in the field of artificial intelligence (AI) have demonstrated that the speed of technological progress is faster and more unpredictable than policymakers around the world have anticipated,” the letter reads.

”We are moving very fast.”

The letter further asks the principals of the Trade and Technology Council (TTC), a forum for the U.S. and EU to coordinate approaches to economic and technology issues, to agree on a preliminary agenda for the proposed AI summit and for companies and countries worldwide to “strive for an ever-increasing sense of responsibility” while developing AI.

“Our message to industry, researchers, and decision-makers, in Europe and worldwide, is that the development of very powerful artificial intelligence demonstrates the need for attention and careful consideration. Together, we can steer history in the right direction,” the letter said.

CBS’Google CEO Pichai Sundararajan, better known as Sundar Pichai, also expressed caution around the rapid development of AI in an April 16 interview on CBS’ 60 Minutes, saying that society might need time to adapt to the new tech.

“You don’t want to put a technology out like this when it’s very, very powerful because it gives society no time to adapt. I think that’s one reasonable perspective,” he said.

“The pace at which we can think and adapt as social institutions compared to the pace at which the technology is evolving, there seems to be a mismatch,” he added.

However, Pichai also noted that while there are causes for concern, he does feel “optimistic” because of the number of people worrying about the implications of AI so early in its life cycle compared to other technical advancements in the past.

“I think there are responsible people there trying to figure out how to approach this technology, and so are we,” he said.

Related: Elon Musk to launch truth-seeking artificial intelligence platform TruthGPT

The European Union is already looking at AI with its Artificial Intelligence Act, while the European Data Protection Board has created a task force to examine the generative AI chatbot ChatGPT.

The letter from the EU politicians echoes the same concerns put forward by more than 2,600 tech leaders and researchers who called for a temporary pause on further AI development, fearing “profound risks to society and humanity.”

Tesla CEO Elon Musk, Apple co-founder Steve Wozniak and other AI CEOs, chief technology officers and researchers were among the other signatories of the letter, which was published by the United States think tank Future of Life Institute (FOLI) on March 22.

While the EU politicians agree with the “core message” of the FOLI letter and share “some of the concerns,” they have come out in disagreement with “some of its more alarmist statements.”

Musk has continued to highlight the risk he believes AI could pose in an April 16 interview with Fox News, saying that just like any other technology, AI has the potential to be misused if it is developed with ill intentions.

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