The European Securities and Markets Authority (ESMA) has exempted Bitcoin (BTC) miners and Proof-of-Stake (PoS) validators from the obligation 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 are subject to strict regulations, and miners and validators, whose primary role is to facilitate blockchain transactions rather than engage directly in trading activities.
In December 2024, ESMA clarified the classification of entities falling under Persons Professionally Arranging or Executing Transactions (PPAETs). There was initial uncertainty over whether miners, validators, builders, and searchers would need to monitor and report suspicious activities in the crypto markets.
However, ESMA has officially excluded these groups from the PPAET classification, ensuring that they are not 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, “ESMA’s decision is significant. It’s good to see that they considered the potential negative impact on the industry and the EU, highlighting how a different decision could have encouraged these miners/validators to leave or avoid establishing themselves in the EU, pushing innovation offshore.”
The Global Shift in Bitcoin Mining
Despite Donald Trump presenting himself as a pro-crypto president, his trade policies have created obstacles for Bitcoin miners in the United States. U.S.-based Bitcoin miners are particularly concerned about the impact of tariffs on Chinese imports. Although these tariffs were implemented to protect American manufacturing, they have resulted in increased costs for mining hardware, a crucial component of Bitcoin mining operations.
Bitcoin mining heavily 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 firms face higher costs and potential disruptions to the supply chain, making it more difficult to scale operations and remain competitive in the global market.
While some countries impose stricter regulations, Belarus is taking a different approach. President Aleksandr Lukashenko has called for the improvement of the country’s energy infrastructure and the utilization of cryptocurrency mining to make use of surplus electricity while attracting foreign investment. With an excess power supply, Belarus aims to position 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 received 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.