Panel - MiCA and Beyond: Navigating Regulation

Okay. So, best thing would be if each of you gentlemen would introduce yourself and say about you, your expertise so that the public will uh get to know you better and we set the stage for the for the conversations.

Yes. So, uh hello, I'm Mihi Kan. Uh everybody calls me Mike, so you can call me Mike to be more informal. Uh I'm a lawyer in the Klujar Association and um my expertise is in commercial law and uh this implies a lot of contracts and a lot of um transactions which nowadays are done with cryptocurrency as well. Uh and that involves a lot of uh the new regulations that have to be practically u applied.

So uh I think that uh that that's the thing that made me to to come here. So I hope to have a very good talk.

Thank you.

Hello everyone. I'm Adrian. I'm working for UNODC which is United Nations Office on Drugs and Crime. I'm probably the only institutional in this conference and in other conferences like like like this. My expertise is on anti-corruption.

I originally was an investigator with the anti-corruption general directorate in Romania. Since then uh like six years ago I left this business to work internationally supporting different countries in different capacities around the world. I worked on anti-corruption supporting uh development of legal frameworks and u and strengthening capacities of of law enforcement agencies and other authorities in Serbia, Muldova, Ukraine, uh Western Central Africa where I was the UNODC regional anti-corruption adviser and now I'm the coordinator of uh the anti-corruption program of UNODC uh in Hayiti and more and more I'm working on anti-corruption at the global level for NODC uh to find the the intersection between anti-corruption, elicit financial flows, blockchain AI in everything that this concerns investigations and also how we can use these technologies to better uh regulate enforce transparency etc. Thanks.

Thank you.

Hello. Um I'm Milakovich uh attorney law from Belgrade Serbia. Uh I'm one of the coorganizers of Eid Belgrade and uh the rest of the year I'm a lawyer to several uh crypto web three projects and field of my expertise uh encapsulates corporate tax law and um crypto law crypto regulations and I'm very happy to be here today with you to discuss um from non-EU EU perspective u ma regulation and thank you for the invitation.

That's super great. We really need uh in addition to EU laws some fresh insights from outside the EU. I'll also introduce myself. My name is Danna Stetu. I'm based in Bucharest.

I've been in the crypto space since 2017. um initially starting with advising ICOs in uh the age of the ICOs back then and uh in 2024 last year I uh filed for a Mika license in the Netherlands. So from the Eastern Europe I'm the first lawyer who applied for a Mika license and currently the only lawyer in Romania who has done that. So uh we have uh nice experts here um law enforcement um lawyers from u Romania and from Serbia. So I believe that the discussions will going to be really really hot.

Okay. So let's start um from an EU perspective first. Do you think that the authorities are um starting to shape the Ethereum ecosystem and what will be the next move? U I I I think that it's not now that they started shaping uh the Ethereum and blockchain ecosystem in general. It's not since Mika that we have uh regulations not like Mika but we had certain regulations.

We had uh anti-moneyaundering directive that was speaking already about uh about uh crypto that was speaking about compliance that was speaking about customer due diligence. Uh so since then already I think that in institutions uh started shaping this uh this industry and more and more I think that we are going to see uh the national competent authorities uh like SFA and uh and the law enforcement looking into this uh into this environment more and more see more investigations on frauds etc. See more oversight of the the authorities on this industry.

Yeah. Uh I totally agree and uh I think that uh the implementation of all the crypto assets has been done but uh I think that now we are in a very hot hot spot and a very hot place where a lot of things happened and I told them and uh that I have a very very nice example. I thought that I will say it later but um yesterday I uh was not here because we signed a contract u in which the price was paid in cryptocurren crypto assets uh and we had a very huge problem here in Romania uh for anti- uh laundering anti-money laundering here the AML here was not letting us sign that contract because it was paid with several crypto assets uh and because of Mica and because of uh a lot of sec new security things uh we we managed to to go through that with that transaction. So I think that uh the institutions start to to know start to acknowledge that crypto is a reality. It's not something that might happen.

It's something that is happening. Uh and I think that uh yes they are changing and they want to imply and to implement these things. the next steps. Uh I think that we have we the perfect thing would be to have a EU regulation for many more uh fields not just for not not just MA but a lot of other a lot of other stuff and uh I think that the top of the iceberg would be if uh real estate or um uh blend would can be and would be able to be sold like and transaction transactions with real estate could be made by uh on blockchain and I think that uh that would be the that is the main goal to to do this.

Interesting. Interesting. Uh before giving the the mic to uh taking the mic uh to share uh from Serbian perspective perhaps I will just um make an intervention. It it's good that you pointed out maybe apart from Mika which is a regulation meaning that it comes directly into the national uh legislation without being transposed maybe it would be good for example in terms of AML uh that we don't we shouldn't have only a directive and from state to state we implement it differently maybe we should have a regulation in the future and I think we are reaching that point uh for 2027 for example Yeah. Yeah, please.

And we don't have regulation in Europe but we have something that is also incredibly important to mention in terms of AML regulations which is FATF which is financial action task force which acts as a global intergovernmental body like a watchdog for implementing uh AML and based on the policies the recommendations they have 40 recommendations on AML a lot of of regulation of state regulation are being shaped and respected and taken into consideration But what they are what they are saying on on this topic.

Thank you.

Just for for the audience and the context. So uh directives are bare minimum that EU sets and as such they are transposed international uh legislation while regulations are directly uh applicable to national uh on the national level. So it's uh something that is more effective and take should take uh less time to to uh adopt it on um on a full scale. So just a short remark

very good one and uh share your point of view. How do you think uh for example um Serbian authorities or other authorities that you interacted with in assisting your clients, do you feel like they are putting some uh requirements on Ethereum projects? Do you feel like they want to shape the future?

Uh well, I believe Serbian authorities as well as as the EU authorities and and other regulators throughout the world are chain agnostic. So they don't really care that much about uh blockchain you are built on. Um Serbian authorities uh especially central bank who is in charge for cryptocurrencies and uh Serbian exchange um securities exchange commission. So Serbian SEC um is uh in charge for uh tokens. Um well it depends whom you ask.

Um central bank of course is um um concerned about monetary stability of Serbian diner and um not very open towards uh web3 industry while uh SEC is um in better position because they u monitor tokens and um this token economy and of course they are more open to to uh have more token issuance in uh in Serbia. Uh in general, Serbian law on digital assets is uh similar to Mika. So has similar uh areas that regulates and for time being I don't see uh on the horizon that uh the law will change uh in order to comply with Mika but I guess in in three to to four to five years probably there will be discussions about that as well uh because Serbia is on the accession path to the EU and uh as with other laws and regulations such as uh VAT directive or GDPR. Uh we synchronize our laws to to the European.

All right. All right. So because we also want to um help the founders, help the builders um the the web three space. What will be your one advice from a regulatory perspective that this is the most sensitive matter from your perspective that a builder or a founder business owner cannot afford to ignore?

May I start?

So wherever you are from uh be it Serbia or the EU or any other jurisdiction um pay attention to what you offer. Is it um token that you want to issue and uh is it utility or security token or more importantly if you offer any services uh uh be careful uh what that service might be in order to uh comply with various requirements that uh regulators uh pose to to projects because um it's very difficult to navigate uh this today. Um crypto regulations without uh any any kind of of license because many services that I see in uh in practice that um startups and and projects offer uh can fall under some definition of licensed activity. although they do not look like something that is um obvious uh and that's that's the trap that founders uh should avoid. I

exactly

yeah for me the most important provision and I will mention it exactly it's the recital 22 uh it's why it is the most important we've seen

of Mika uh of Mika uh because we've seen a large understanding in the industry that decentralized whatever defy Dow they are not actually regulated did and it's not there where we should be starting. We should start by recital 22 which defines what is actually centralized and in the recital 22 we have mentioned that if you have any sort of control over the decentralized protocol then that is not actually uh decentralized. If uh what we call decentralized has some parts that are centralized then is not that is not actually uh fully decentralized. So then it falls uh it falls under under Mika and this is the question that we need to ask ourselves as as founders. What is actually decentralized when we start a company and in that regard another another very important aspect in terms of regulation.

ESMA which is European Security Market Agency Authority um is stating in their in their guidance for this year that the the full um uh responsibility for how you identify how how you define your product uh if it is a token or crypto asset is up to you and after that to the national competitive authority in in the oversight but the responsibility is up to you to define it to understand Mik and define it according to Mika to understand if it falls under Mika or under AML directive or other other legal legal framework.

That was really great. Uh I really I really like it that we are on the same page. Adrian, I also highlighted in a few other instances that it's so important not just to claim that we are decentralized but also really be in in practice and take the test if you are.

Yes, I I totally agree. Um and I think to to put it more simple uh I think that you have to be very careful uh because you probably would think and that you are doing something that is not under Mika but it's probably but probably is under Mika so you have to you have to respect all the all that and uh another thing that I uh I would like to to say here probably is not the not the most important one but uh dealing with um companies and associations that use crypto assets and after Mika came in uh they think that the things are very very uh well u regimented and they are but you but you have to be very careful how you integrate this in with other national law uh things and uh especially uh you have to see how you uh put in your uh to see your accountant and to see your accountability laws and uh the uh financial laws uh because uh you the things seem to be very clear but have to be integrated in the international and other international directives as well. So first of all be careful if you sell something or if you do something that you think that it's not under Mika it very probably it is uh and uh to be be very careful how you integrate it with with other other parts of law

that that was a really good input uh Mihi um if you're not aware there are some correspondence between European Commission and ESMA for example there are some parts where the the product is complex. is not just uh Mika, not just crypto asset, but maybe it has a component of lending, maybe it has a component of payment and uh do you overlap in some places with payment institutions regulations? Maybe you overlap in some places with borrowing, lending, this is also uh regulated. Yeah, exactly. So uh it's very good point, Mihi.

Thank you.

So let's move forward. Um, Mika it's often seen as a barrier but do you think that once you get compliant you can have like an competitive advantage out of this?

Yes, I think that you you now uh as uh in every field I think the start is very important and to be on the first wave. So I think that yes it's a very important time to to do this and uh there are lots of probably problematic stuff that that we can we can uh see in uh and we can categorate Mika as a barrier uh like I don't know the the thing that you have to uh for for instance if you have stable coins or stuff like that you have to there to be 100% backed up and that can be very very difficult for a lot of u startups to have all the money that they need to in order to to do the product. But once you do this or or once you are uh you have the the Mika approvement, it will be very easy for you because you will have the basis to do a lot of a lot of businesses and you you would be able to react very very quickly to what what happens on the markets. So yes, I think that may ma may be seen as a barrier but uh if you respect it and if you comply with it from the start it will be a very good advantage. Maybe not now but maybe in one two or three years time you will you will think that it would be it was a very good idea.

Adrian,

yeah my my take on this is that regulation will come all around the globe. If we speak about moving money and moving value and moving rights, property rights, regulation will come all around the globe maybe at different paces, maybe uh uh you know in different forms but it will come. The fact that EU is the first that comes with a with a comprehensive regulation, I think will give a competitive advantage especially to the companies uh that already get licensed under under Mika on the on the global global uh global scene that will be seen like a vetting. The fact that you got the license under under Micah will give you the possibility will give you a P position in other legislations. Uh um as well uh so yeah definitely I don't see it as a barrier.

We need we need clarity. uh I don't think that there is any developer or I don't know uh blockchain creator that wants that his blockchain is being used for uh organized crimes uh organized criminality or corruption or illicit financial financial flows. So we need both. We need a middle ground where we fight against criminality of course protect everything that that the crypto industry stands for uh anonymity decentralization etc.

Thank you.

Um I beg to defer. I think that uh Mika in spite of bringing clarity uh is bring brings also a lot of difficulties especially for startups because um it's so expensive to to comply with all the requirements um let alone stable coins. It's not something that happens on a on a regular basis although it's all the rage these days. uh but um other services which might fall under uh CASP regulation crypto asset service uh provision um requirements under Mika uh because it's still early phase of uh Mika application and on the market it's graft uh and uh it's so expensive to to comply with all the requirements that's why only uh big exchanges I would say behemoths in on the market such as OKX, Bit Panda, Bit That, Bit uh other things. I I don't know um how many Yeah.

um how many of them applied, but they're really big players and they can afford to pay hundreds of thousands of euro to obtain licenses in um Malta, Austria, Germany, Netherlands, u I don't know where where else and it's not only Mika but uh I think that EU is overkilling uh with with regulations uh because there are other um requirements under DORA it's digital operation resilience act

very good point

uh also it's huge topic these days with um GDPR interpretation so are validators and nods u data processors um and uh the way that European authority for data protection sees it um I think Vara is talking about that uh on on the main stage now. So if you see her chat with her, she will be happy to share her insights with you. There are other issues such as transfer of uh e-oney tokens which are stable coins. So do you have to comply with um transfer of fund regulation, payment services directive too and so on and so forth. Um that's from my perspective.

My perspective from uh like a side perspective.

Thank you.

Question.

Sure. Sure. Sure.

So I I I definitely this to see your point of course but I'm curious what could be the alternative because I I I I see that it can it's overregulated. It's overexpensive to do if only if you implement the the due diligence customer due diligence that is is foreseen by and described by uh anti-money laundering directive 5. It's heavy. What is the alternative? What could be the alternative?

How how should that be be done otherwise?

Um I agree that um regulation is coming. the the room for a full permissionless approach uh and decentralized approach is narrowing down uh especially because not many projects are fully decentralized or sufficiently decentralized as Mika puts it. Uh but from some um actions of uh uh of European authorities I see that they are not either aware of how the technology works or uh they have malicious intentions. So I'll let the audience conclude what's uh what would prevail what what could be the conclusion. So I agree that regulation is coming and necessary but the way uh this whole approach to web 3 in the EU I think it was rushed a little bit uh and now it's kind of uh uh like deadlock because there are some um rules in place but they're not fit they do not fit into into web 3.

Exactly. And uh regulators are um perplexed how to proceed further. So how to move forward?

Okay. Yes, I see that point. Uh and uh it could be discussed if it's a too early or not. I think that it's not the right time. Uh maybe now, but it has to be done in the very near future.

But I wanted to to add something on the thing that you said that it's very uh expensive to comply with the CASPs and to do to to be in accord with Micah. I think that yes it is. But uh it could be uh a very it it could be it could open a lot of doors because uh everybody from my point of view uh that works in or develops blockchain uh asks me one question or the most asked question is will we will be a will be able to to sell land and real estate over with blockchain and I think that this uh really helps us in the future to do that because we have to know uh and one of the problem one of the big problems there is that uh if you we don't have information about the um guy that owns that that coin we don't know who pays the price we don't know a lot of a lot of stuff and uh I think that this would be the the start and a very good foundation to build and to to go forward and to be able to reach this this goal of everybody to to do real estate over blockchain

thank you mihi Right. I will also spend a little time talking about the cost because as a person who went through the license, uh I'm super aware of the cost that uh a crypto asset service provider will incur in obtaining the license. But I also want to point that there is a bright side. Once you get that license, you can have big investors because they will uh you will present to to them as being reliable, as being compliant, authorized, licensed. You can have investors like I believe Sequoa like big big companies from the United States who want to do business in a regulated crypto asset service provider in the European Union.

I also believe that um you have the possibility to um do an IPO if you want because you have that credibility that you've been licensed and getting this crypto asset service provision license. sometimes equivalent in terms of effort to taking a banking license and it also uh gives you that uh credibility like you are a bank but in the crypto space and uh when it comes to cost I think it should be more awareness that you put the cost into something for your future uh to be regulated and to be compliant because you know the cost in web3 space uh sometimes uh the projects the business owner reneurs are more familiar to paying um thousands of grounds in I don't know what kind of influencer or sort of formula one uh or GTC um who are promoting the company but when it comes to allocating the budget for being compliant they they somehow feel like um it's too much and I think the priorities should change because your future and doing business in a regul regulated way. It's more important than just making visibility with influencers and uh big stars. So um because we we have Ethereum in our um attention, do you think that um there is a blind spot for Ethereum uh Ethereum builders that they should be aware of from a regulatory perspective and correct something or adapt or at least anticipate um the regulations in somehow?

Yeah. Yeah. For me it's I come again to the example that I previously offered. I think that is very important for anyone that is building on Ethereum and on any other blockchain to understand Mica and to understand as I said it's their responsibility to understand under which provision the product they they are creating false. So that is that is really important to understand if it's under Mica what they need to to comply.

Um yeah, I think this is the the thing that is the most tricky and the the most important to to figure out.

Thank you.

Um although it's not intuitive, um there are certain aspects of DeFi uh which are neglected especially by on on the developer side. uh as uh Mika defines um custody among other things as um pro um enabling uh users to access certain platforms. So um and that's okay um nothing against that definition. But if you dig a little bit deeper um what is access? So if you for example develop um um interface or front end for a decentralized uh platform such as unis swap which because of its decentralized nature does not fall under mika.

Um you as a front-end developer might be liable under mika because you provide access to that defy protocol. So that's something that um is not often uh I mean not enough in focus of of developers because um they are focused on the UX and UI hopefully um and the functionalities of that front end but um they do not know or they're not aware enough of their um obligations and liabilities according to various regulations. So uh that's that's one take that um developers should should consider.

Yeah. Yes. This was exactly the the thing that I wanted to say and I wanted to be the last because it was I want to be very clear this that uh I saw that a lot of persons a lot of developers have problems because they think that the company they develop to if that doesn't fall under Mika they do not fall under Mika as well. But this is not this is not a rule. If you're a developer, maybe what you do falls under Mika even if you work for some some other company that does not fall under Mika.

So that's very a very important thing to to take care of. Just

yeah please

another very important principle under Mika it's uh same risk same rules meaning that even if a product is being developed whatever you are developing on blockchain the simple fact that we developed it on blockchain if the use case if that certain token is behaving like a security that does not mean that will fall under Mika that will mean that it's a security so we are looking actually at what what we have developed does and not if it's being developed veloped on blockchain it's automatically under under under Mika and another principle is substance over form in the sense in the same sense as same risk same same same rules

very good um yeah please yeah so I know that uh legal documents are boring and that nobody has time to go through through scores of pages to understand some concepts that uh we are trying to uh present here um so Um go to YouTube and find um video of uh Eva Vong from Parity or Polka Dot uh talking about developers liability uh at Devcon conference. Uh it's very uh very well uh yeah very well uh explained and it will give you some sense of what is expected from you as a developer.

All right. So since we are also on the topic with developers um you you see that under Mika Mika started to regulate very much the market abuse and Mika it's concerned that the project won't um do pumps and dumps won't um do inside insider dealing won't manipulate the market. There is a certain thing with the developers that for example um when they build they they may have some uh interactions with with the blocks and they might want to extract the maximum advantage which is called uh MIV maximum extractable value. Um I think it's something that we should bear in mind that um you could also find some regulations even if you operate in a decentralized space that are against market abuse and it might impact you. Also there are some sort of regulations that interact with with developers with builders when it comes to anti-money laundering and um I I believe that from a a building perspective what uh tornado cash did as an idea and uh it's good but over over um overlooking overlooking certain aspects uh was was a minus in uh in that thing.

Maybe Adrian, you want to uh give some more insights around this topic with defy and some other um rules and regulations that we should be aware of.

Yeah, I'm going to try to give some some concrete examples and less rules and and regulations and and provisions. Uh just imagine I mean I know that in this space we speak a lot about um anonymity preserving our identity uh decentralizations which I completely agree with it but I haven't I I almost I haven't heard at all in these three days and in general in these kind of conferences people speaking about criminality that is being used in this in this uh with this crypto assets and it's actually something that we need to reconcile because in the other echo chamber that I'm usually uh working which is governments and UN and so on they also see more of course the angle of criminality in this one it's more this other angle the centralization okay we need to stay together and try to understand that we need to fight against criminality while preserving also these values that we are promoting through web three uh companies and I'm giving a a really simple example just imagine that if you are a terrorist organization and Do you want to pass uh to Europe with $500 million just remembering your keys? You are going to be able to do that. Get to Europe. Nobody no one no one will know.

Especially if you traded that directly. Someone gave you the keys. You just gave the key money. No one will know that you got actually $500 million in Europe that we can fund whatever you want from terrorism to drugs trafficking to organs trafficking to to whatever. And I know that for a lot of people that have only lived in Europe and in stable countries, what we are having here in this room, it's it's a given and it's we take it for granted, which it's really not.

I live in a country uh now in Hayiti where uh if I'm walking down the street, uh my chances to get kidnapped are very high just walking down the street a few hundred meters. So this is a real risk, the kidnapping in in uh in Hayiti. We want to preserve this safety that we have in countries like like Romania to do this kind of gatherings without being afraid of of this kind of criminality. So this is where I really think that due diligence I know that no one likes in this indust but it's important and we need to find the angle to protect the values of the industry but at the same time to protect the people from organized crime, terrorism uh etc.

Thank you. Uh I just thought yeah I just wanted to add that uh like the example that that I started with

if we don't know that uh somebody's fighting against criminality we have to keep in mind that the governments do this and uh because uh this thing is is is done may be uh challenge in developing because if you don't comply from the from the beginning there are some institutions that can come and uh and enforce.

Yes. And enforce you to do it. And it may not be not be that nice. Yes.

That pleasant. Of course not.

Ilia,

maybe I'll give you

Oh, okay. Uh well uh what

some thoughts if you feel like um some sort of regulations um either market abuse or anti-money laundering should be taken in consideration more in a decentralized space even if it's decentralized.

Uh well um again not many projects are really

decentralized

really decentralized. Yeah. Um, so it it's maybe not that uh that big issue. I'm aware uh of um bad actors, malicious actors using using crypto. But whenever I encounter an argument that uh crypto is used by criminals uh I ask those um those with whom I discuss just to Google few prominent money laundering cases uh with banks like Wells Fargo, HSBC, it's hundreds of billions laundered through through uh bank accounts which is uh way more than than um than with crypto.

So the we we should be aware of the risks that that um it brings. But I would say still the cash is the king. Um because in situations like we had recently in um Spain and Portugal when the power was u uh when there's there was a blackout uh for I think 24 hours or something. Um you could not do anything uh with with e- money with crypto uh even though you had hundred of bitcoins. So um as Adrian said there should be balanced approach and let's and and as a an ultimal ultimate and principle we should have in mind that if you choose security over freedom you will lose both.

Uh so that's that's my take.

Thank you. Interesting. Super interesting. Um while while you were mentioning um your uh views I was thinking that uh since the criminality is still very important to fight against and you are mentioning cash is king indeed cash is king uh but the authority are also looking when other kind of institutions the traditional one are collecting cash are they AML compliant I don't know If you know um some years ago, um ING in the Netherlands was fined with $700 million for anti-moneyaundering for the the ones in uh crypto space. I know you know how Binance was fined, how Crypto.

com was fined and so on. uh and I believe it's better to comply in advance and to budget um compliance uh than suffering the consequences of a big fine which in some cases could bring the liquidation of the company. Um Adrian uh in your law enforcement uh I will start again with you. Um maybe you can share a little bit um about your activities and if you see any sort of um cooperation between the web three space and um a a a governmental institution uh in law enforcement. I I actually think it's it's essential this it's actually what I what I mentioned we we cannot continue speaking in echo chambers even if of course there are efforts of consultation we need to to be together even in this conference I have not seen one politician one institutional I'm I'm the only one coming from from this world and and I don't think that that it's possible okay it's beautiful innovation but it will never be able to properly function if we don't if the ones that regulate don't hear this industry to do it better if we only complain complain about the regulation that won't help much right so we need to to to get together and work on on it and I will give a few examples where we could work together and where we can work when I where I can work together as as as you know DC facilitate the uh this bridging between uh uh companies private sector civil society and governments just to understand both perspective because both perspective are important um on investigation is something that I'm that I'm working on now developing um investigations uh on chain and capacities of states at a global level uh onchain and also artificial intelligence in financial investigations and who is a better uh onchain investigator than the one who has developed the blockchain.

So that is something that I also am actually I'm I'm I'm shortly we are going to start implementing some some projects in in that respect. We already have some trainings on blockchain investigations etc. We are looking more at AI the way we can be using AI in financial investigations and we need people that actually need know how to how to use these tools and can uh can teach others. And the third very important point that I see we speak about in web three speak about decentralized autonomous organizations the governance in Dowos etc. But for me the best use case it's not the money uh it's not uh I know pumping me coins in this in this industry but is making governance much better making people's life much better this was for me the the best iteration for for this industry making governance and governments more transparent making them uh more friendly uh and and open to the to the society to the population so this would be the the Third uh thing where I see uh an alliance between governments and uh and uh crypto companies to build use cases and really show how this blockchain can help a govern govern better.

As simple as that. We speak about a lot about a lot of use cases but there are not a lot of applications that have easy use case that can be uh easily implemented that is cheaper. I don't know this is what in my opinion we should show government and offer them to have also the adoption that we speak for so long in in in this industry.

Yeah. Ilia share something about your um interaction perhaps uh uh with government in uh Serbia. Is the government supportive with web community? Perhaps you can or they are doing some projects pilots together.

Currently they're not interested that much in in web community which is good because uh it let us uh do our thing without any uh obstacles interference.

Yeah. at least not obstacle if not supportive. Ideally, it would have been to be supportive.

Um I I have only nice words for for SEC uh who support our initiatives, participate in our events and um who is always ready to uh listen about the problems and ideas we bring to them. So that's really commendable. Um it's good that our government u did this uh solid work with u um proposing law and digital assets. Uh but it it was not just because uh they wanted to be the forefront of this industry but because they were bit afraid that foreign direct investments will uh stop after during and after the covid. So that's why they rushed to to enact the law to tap into this crypto potential.

Uh so when they uh had seen uh that investments keep coming uh their enthusiasm for crypto uh fade away.

Faded away.

Yeah. But as I said uh just don't um obstruct us and we'll be we'll be we'll be good. Uh because The Serbian web community I would say is thriving. That's maybe uh too bold to say but there are other uh Serbian friends from that community with whom you can uh discuss that. Uh and projects that came from Serbia also prove that.

Okay. Thank you. Um maybe on uh Mihi wants to to add something and then we give to the room

very briefly and u I will probably end on a negative uh side but uh I want to add something about what Adrian said. I think that it's very important uh yes this um relationship between developers or persons who work on blockchain and the authorities because uh I will say very brief briefly what I can about the case we it was uh in Romania here finished like uh two or three months ago. It was a moneyaundering case. Uh and uh it involved cash and some crypto assets and uh for the cash part it was very very simple to uh show that uh some developers and traders were innocent. But uh for for the crypto part of view because the the law enforcement u authorities literally do not understand what uh or or did not understand there what what they were doing.

uh it was one year's worth of u stress to to show and to prove their innocence and uh that that guys there was there were seven guys were actually facing prison because they they uh thought to do something revolutionary uh but uh yeah it it all went well in the end but I think that yes that that should be and there should be a relationship a very strong relationship between authorities and the crypto developers ers because this I know all the crypto world is very nice and it has very good principles but it's it functions in the real world and and it not the the two of them cannot be separated. So yes, I think that that we have to have more conversations and to to use specialists uh even in the other part. So the authorities to speak and and learn from specialists because it could be very it would be a very uh negative outcome if not so

very good point.

Better UX and UI would help greatly. [Music] Let's let's uh give to the uh audience the possibility to ask us some questions. We have uh quite a few. Oh,

do you want to read them?

Yeah, sure. I'll read them out. Um Solidity Wizard, let's start off with you. So do we have similar expectations from the traditional value exchange chain eg banks and blockchain in terms of regulation or are we more demanding in any of these two? Does anybody here want to take that?

Uh should I take it? Okay. So uh when we exchange uh value in the traditional finance world we have some rules which in the exchange of fiat for crypto they also apply. So I would say it's uh absolutely equality between the two. Fiat for crypto goes by the same rules like uh fiat in the traditional way.

So it's not more demanding in my opinion. Perhaps let's go on to a slightly simpler I hope question. What's the average final price to obtain a Mika license? Asks Ether Dreamer 245.

That's the question at the bottom.

No, I think that's

what's your point on the fact that regulation is bounded at the bottom here.

What is the final price to obtain a Mika license? Um a final price it depends on the complexity of your products. It depends what's the service you offer because under the Mika regulation there are a couple of services and based on the services you also have a minimum capital that you need to keep at all at all moments in uh in your uh bank account uh like capital adequacy rules. For example, if you do just something simple uh exchanging uh fiat for crypto, crypto for other crypto and having custodial wallets, you would have just like um one 125 uh euros, thousands euros uh to keep at all points in in uh the bank account, which is a cost at all point of doing business. For example, the Mika license per se, it's of course expensive.

um because it involves um lawyers and it involves also authorities. For example, in the Netherlands um the uh persons who are reviewing your case, the case handlers have a um a fee of €200 per hour. And if they are reviewing for 400 hours your application, you can make the calculation. For example, this is a fee, just a regulatory fee, not a lawyer's fee. Then it comes, of course, the lawyer's fee.

And uh it depends how good you cooperate with the lawyer and how um good expert the lawyer is. If the he has already good knowledge, it could help you navigate the um smoothly and in that case for for you the cost would be less. Let's say just from the top of my head. something else.

Well, does somebody want to take question number two there?

Yeah,

yeah,

go ahead.

Uh, okay. So, what's your point on the fact that regulation is bounded to physical borders and blockchain as it runs over the internet is not. Is there any difference between regulating blockchain versus regulating the internet and how we interact digitally? Actually, it's it is regulated and even blockchain can be limited to physical borders. The fact that you can move assets and cryptoc currencies over borders without being directly stopped by a government doesn't mean that you don't have regulation in a certain country.

And if you can do some things on blockchain that are forbidden in a certain country does not mean that it's legal and it does not mean that you are not go could you could not be subject to uh to investigations and this is why uh I'm I'm I'm going to advocate for that as as you of course it's important to have international cooperation and to have uh uh to have um cooperation at the at the international level between countries between law enforcement to trace these kind of assets and it's Not only actually the case of blockchain and internet uh traditional assets are traveling across uh banks from different uh jurisdictions and we need to apply the same kind of strategy in terms of investigating or in terms of respecting different legislations from different uh jurisdictions. So this would be my my answer to that.

Um yeah just to uh follow up on the second question. So um yeah this is kind of conservative approach that regulations are bounded to to physical borders but uh in case of Mika uh it applies in Europe that's that's true but then you have reverse solicitation rule uh which uh forbids you as a non-EU country offering services to uh EU users without having a license that would be um avoiding of requirements that Mika opposes to to European companies and that would make an uh unfair competition. So it goes beyond borders. Just have a look of what happened to to Dwan. He's extradited to the US.

So um with countries that have strong international um reach, let's let's put it that way. um they can expand their regulations across the national borders.

Awesome. Thank you very much. Um there's actually another question that's been added, but I can't see it because it's at the bottom. Can someone scroll down, please? If developing for a client, should the client be the one who deploys a smart contract from Ether Bunny 461?

It's a bit of a broader question there. Um is that something that someone wants to answer? Sounds like a no. Um, okay. How about we go on to a different question?

Um, what category, what type of web 3 companies probably going to see the easiest integration into Mika? And indeed on the other side of it, what's what's what type of crypto company's going to find it the hardest do you think based off your understanding? Yeah, I think that yeah, I think that we cannot answer exactly this thing because I think that there are challenges uh for all the all the web three categor categories and clients and I I think that what should what sounds easy for one company maybe it's complicated for the other one and the fields are very because Mika is a very long and it regulates a lot of a lot of uh stuff and a lot of things fall under Mika and I think that we cannot say which would be the the easiest because they all the companies will face.

So it'll come down to the specificity of the company itself rather than what category it falls into. Basically,

I I would say it's more of a joke that the fully decentralized company because like that if it's fully decentralized and if it's a smart contract locked without the possibility to control without the possibility completely immutable etc. then that will 1% fall outside of Mika. So that's the easiest

I was thinking you would reply with something like that. Yeah.

And also this is important in terms of innovation. I think this regulation where it's like where where Micah takes into consideration explains what is fully decentralized might actually encourage to really create companies that are really completely decentralized because there are not a lot of them. If we start looking in the protocols how they are being controlled there it's very few companies that are completely decentralized. That might encourage innovation towards real complete decentralization. Okay, that'd be quite exciting actually.

Um, any other questions from the crowd? Do put your hand up if so? No. Okay, any closing thoughts from our panel of experts or would you like to finish there?

Just give them a round of applause.

Round of applause, everyone.