The European Securities and Markets Authority (ESMA) has exempted Bitcoin (BTC) miners and Proof-of-Stake (PoS) validators from the requirement to report market abuse under the EU’s Markets in Crypto-Assets Regulation (MiCA). This decision differentiates between crypto asset service providers (CASPs), such as exchanges, who must adhere to stringent regulations, and miners and validators, who primarily facilitate blockchain transactions rather than engage directly in trading activities.
In December 2024, ESMA finalized its position on which entities fall under the category of Persons Professionally Arranging or Executing Transactions (PPAETs). Initially, there was uncertainty regarding whether miners, validators, builders, and searchers would need to monitor and report suspicious activities in crypto markets.
However, ESMA has officially excluded these groups from the PPAET classification, ensuring that they will not be required to monitor market abuse. Instead, CASPs like cryptocurrency exchanges will be responsible for market surveillance and compliance.
Patrick Hansen, Circle’s director of EU strategy and policy, commended ESMA for adopting a balanced approach to regulation. He stated: “Important decision by ESMA. And good to see they took the potential negative impact for the industry and the EU into account, highlighting how a different decision could have incentivized these miners/validators to leave or avoid establishing in the EU, pushing innovation offshore.”
The Global Shift in Bitcoin Mining
Despite positioning himself as a pro-crypto president, Donald Trump’s trade policies have presented obstacles for Bitcoin miners in the United States. One significant concern for U.S.-based Bitcoin miners is the impact of tariffs on Chinese imports. While these tariffs were intended to safeguard American manufacturing, they have led to increased costs for mining hardware, a crucial component of Bitcoin mining operations.
Bitcoin mining relies on application-specific integrated circuits (ASICs), which are specifically designed for mining digital assets like Bitcoin. However, nearly 98% of ASIC miners are manufactured by Chinese companies such as Bitmain, MicroBT, and Canaan. Due to tariffs on Chinese technology imports, U.S. mining companies face higher expenses and potential disruptions in the supply chain, making it more difficult to expand operations and remain competitive in the global market.
While some countries impose stricter regulations, Belarus is taking a different approach. President Aleksandr Lukashenko has urged officials to enhance the country’s energy infrastructure and utilize cryptocurrency mining as a means to utilize surplus electricity while attracting foreign investment. With an excess power supply, Belarus is positioning itself as a crypto mining-friendly nation.
Government officials have been tasked with streamlining regulations and developing concrete proposals to encourage investment in the sector. This strategy could help Belarus compete with other countries in the global crypto mining industry. Additionally, the Russian State Duma passed a bill legalizing Bitcoin mining and allowing the use of cryptocurrencies for international trade.
As mentioned in our 2024 report, the bill passed with 404 votes in favor, representing 89.8% of the total vote count. This legislative shift demonstrates Russia’s intention to integrate cryptocurrency into its broader economic and trade strategies.