Eva Kaili arrests a ‘backlash’ for EU crypto regulations, economist says

The arrest of EU parliamentarian and cryptocurrency advocate Eva Kaili has been labeled as a blow to the ecosystem by prominent blockchain industry participants.

Kaili, one of 14 vice-presidents of the European Parliament, was arrested and charged on December 10 by Belgian prosecutors investigating allegations of corruption, money laundering and organized crime involving Qatar and senior European decision-makers.

Belgian police are said to have seized 600,000 euros in cash as well as computers and mobile phones belonging to Kaili and three other people involved in the investigation. Kaili has since been suspended from the European Parliament, of which she has been a member since 2014.

Kaili has been a vocal supporter of cryptocurrency and blockchain technology in the European Parliament and has played an important role in providing direction to the governing body’s approach to the sector in recent years.

Erwin Voloder, senior policy fellow at the European Blockchain Association, told Cointelegraph that the allegations against Kaili cannot be downplayed, but admits that her arrest removes a much-needed voice to support the cryptocurrency space.

Voloder also highlighted Kaili’s role in leading the DLT Pilot Regime and the 2016 Blockchain resolution, as well as her role as shadow rapporteur where she lobbied to raise blockchain technology under the 2020 InvestEU proposals.

Related: Members of the European Parliament vote for crypto and blockchain tax policy

Kaili also took the reins in an individual effort to explore non-fungible tokens (NFTs) within the framework of the EU’s recently adopted Markets in Crypto-Assets (MiCA) regulations. Veloder said Kaili’s efforts to explore NFTs from the perspective of financial services and industrial applications were positive for the blockchain space.

Voloder went on to highlight what he observed as “negative and uninformed arguments” against blockchain and Web3 technology at the German Bundestag in mid-December. The economist believes this negative feeling is pervasive across the continent:

“I think we have a similar problem at the EU level in that ideology can play an overarching role in driving how a certain technology or industry is perceived, especially in today’s hyper-partisan climate.”

Voloder also questioned whether macro events in the cryptocurrency space, including the implosion of FTX, have played a role in branding the ecosystem “industry non grata and guilty by association”.

Kaili’s expulsion from parliament leaves a void for an equally vocal and passionate cryptocurrency advocate to drive regulatory exploration. Voloder offered an optimistic view, referring to a recent workshop in the European Parliament where industry experts and Commission officials presented different views on the sector.

Voloder also speculated that the Directorate-General for Internal Market, Industry, Entrepreneurship and SMEs (DG GROW) could also take up the mantle in developing a framework for NFT and the decentralized financial sector.