EU Crypto Firms To Face Mandatory Cyber Audits as ESMA Responds to Security Breaches
Key Takeaways
- The EU is stepping up its efforts to regulate the crypto industry, focusing on enhancing cybersecurity measures.
- The crypto industry has experienced a significant increase in cyberattacks, with over $1.5 billion stolen in the first half of 2024.
- European countries have faced a series of cyberattacks targeting government institutions, parliament members, and military personnel.
The European Union is racing to shore up its defenses as cyber threats mushroom across the continent.
A key arm of the EU, the European Securities and Markets Authority (ESMA), is advocating for stricter regulations, including mandatory external audits for cryptocurrency companies, to safeguard investors and maintain market stability.
Stricter Security Standards for EU Crypto Companies
The ESMA is calling on EU lawmakers to strengthen the continent’s crypto regulations, urging amendments to the Markets in Crypto-Assets Regulation (MiCA) to mandate external audits of crypto companies’ cyber defenses.
As part of its broader effort to fortify the European Union’s cryptocurrency regulations, the ESMA is seeking to establish a uniform standard for cybersecurity practices across the EU crypto industry.
By mandating external audits, the ESMA aims to mitigate the risks of data breaches, hacks, and other cyber threats that can have catastrophic consequences for consumers and businesses alike.
While MiCA, set to take full effect in December, represents the EU’s most comprehensive framework for crypto assets to date, the ESMA believes that additional safeguards are crucial to mitigate the growing threat of cyber attacks.
The ESMA argues that the collapse of FTX has underscored the importance of rigorous cybersecurity audits to ensure the resilience of crypto companies.
However, the European Commission has expressed reservations, suggesting that such measures might overstep the scope of MiCA.
Cyberattacks Sweep Across Europe
The crypto industry has been plagued by a surge in cyberattacks, with over $1.5 billion stolen from crypto companies in the first half of 2024 alone.
However, other industries and organizations are also under threat.
France, Germany, and the United Kingdom have all been victims of high-profile attacks in recent months.
In March, multiple government ministries in France were targeted by pro-Russian hacker groups. Meanwhile, spyware was discovered on several European Parliament members’ devices in February.
Germany’s military communications were also compromised in March, with sensitive information leaked in an incident believed to be part of a Russian information warfare strategy.
In the United Kingdom, the Ministry of Defence was hit by a major cyberattack in May, attributed to Chinese hackers, which exposed the personal data of military personnel.
These brazen incidents have underscored the growing threat of cyber attacks to European institutions, hence ESMA’s push for better and stricter standards.
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