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Crypto companies should be forced to hold external audits of their cyber defences, according to the EU’s markets regulator, which is urging lawmakers in Brussels to amend the region’s flagship regulation of the sector to better protect consumers.
The European Securities and Markets Authority will on Wednesday say it considers tougher rules on cyber protection to be an essential part of the EU regime covering crypto companies, which is due to come into force fully from December. Widely considered the most far-reaching set of crypto rules so far, the EU’s Markets in Crypto-Assets Regulation aims to oversee a sector that is otherwise largely unregulated and has been plagued by recent scandals, including the high-profile collapse of Bahamas-based exchange FTX.
Esma has pressed for the inclusion of a requirement for crypto companies to carry out a third-party audit of their capacity to withstand cyber attacks as it works on finalising the implementation of the rules, which were passed by EU lawmakers last year. However, the European Commission has pushed back against the move, saying Esma is overreaching by going beyond the remit of the legislation.
Esma declined to comment and the commission did not respond to a request for comment. Cyber attacks have pervaded the crypto industry since its inception, with hackers eager to steal customers’ funds. More than $1.5bn was stolen from crypto companies in the first six months of this year, according to blockchain analytics firm Chainalysis, about 84 per cent higher than the amount stolen over the same period of 2023. “Crypto thieves seem to be returning to their roots and targeting centralised exchanges again,” Chainalysis said, noting that nearly 150 hacking incidents took place in the first half of 2024....
more at FT