TechFlow news — Venture capital firm Paradigm has submitted a comment letter responding to the European Securities and Markets Authority (ESMA)'s consultation paper on strengthening market abuse prevention in crypto-asset markets. ESMA's document addresses measures for implementing the Markets in Crypto-Assets Regulation (MiCA), with the first set of rules set to take effect on June 30.
Paradigm primarily opposes ESMA's stance on "market abuse, such as the well-known Maximum Extractable Value (MEV)." The firm notes that there is currently no widely accepted methodology to determine which MEV-related activities are harmful or suspicious. Requiring ecosystems to monitor and prevent inherently subjective behaviors would lead to inconsistent application and unintended consequences. Paradigm emphasizes the need for a clearer understanding of MEV and further argues that regulating the microstructure of foundational layer blockchain systems is fundamentally misguided.
