- EU might include cryptocurrencies in the scope of the existing regulations.
- The authorities are preoccupied with consumer protection and money laundering issues.
Certain cryptocurrencies may be classified as financial instruments under the existing financial regulation of the European Union, according to the representatives of the European Securities and Markets Authority (ESMA). Namely, the assets created in the course of initial coin offerings (ICOs) with the aim to raise financing will fall under this category.
According to the report submitted to the Commission of the European Banking Authority, it is highly desirable to develop pan-European rules and regulations for digital assets as patchy regulation can be easily exploited by bad actors and deprive consumers of the necessary protection.
“Typically crypto-assets fall outside the scope of EU financial services regulation. Moreover, divergent approaches to the regulation of these activities are emerging across the EU. These factors give rise to potential issues, including regarding consumer protection, operational resilience, and the level playing field,” the report says.
Apart from that, EBA focuses on money laundering issues, as criminals can exploit the ecosystem vulnerabilities to bypass the existing rules while dealing with cryptocurrencies, including Bitcoin, Ethereum and XRP among others.
Also, EBA urges the European Commission to follow the recommendations of the Financial Action Taskforce (FATF) to stop virtual assets from being used for money laundering purposes.
Meanwhile, Bitcoin resumed the downside trend and crashed well below $4,000 handle on Thursday. BTC/USD is changing hands at $3,619 at the time of writing, down over 9% on a daily basis. A sell-off in 2018 took Bitcoin from its all-time high close to $20,000 to as low as $3,127 on December 2018. The downside was partially driven by concerns of regulatory scrutiny.
BTC/USD, 4-hour
Note: All information on this page is subject to change. The use of this website constitutes acceptance of our user agreement. Please read our privacy policy and legal disclaimer. Opinions expressed at FXstreet.com are those of the individual authors and do not necessarily represent the opinion of FXstreet.com or its management. Risk Disclosure: Trading foreign exchange on margin carries a high level of risk, and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to invest in foreign exchange you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with foreign exchange trading, and seek advice from an independent financial advisor if you have any doubts.
Recommended Content
Editors’ Picks
Is Altcoin Season here as Bitcoin reaches a new all-time high?
Bitcoin reaches a new all-time high of $98,384 on Thursday, with altcoins following the suit. Reports highlight that the recent surge in altcoins was fueled by the victory of crypto-friendly candidate Donal Trump in the US presidential election.
Shanghai court confirms legal recognition of crypto ownership
A Shanghai court has confirmed that owning digital assets, including Bitcoin, is legal under Chinese law. Judge Sun Jie of the Shanghai Songjiang People’s Court shared this opinion through the WeChat account of the Shanghai High People’s Court.
BTC hits an all-time high above $97,850, inches away from the $100K mark
Bitcoin hit a new all-time high of $97,852 on Thursday, and the technical outlook suggests a possible continuation of the rally to $100,000. BTC futures have surged past the $100,000 price mark on Deribit, and Lookonchain data shows whales are accumulating.
Shiba Inu holders withdraw 1.67 trillion SHIB tokens from exchange
Shiba Inu trades slightly higher, around $0.000024, on Thursday after declining more than 5% the previous week. SHIB’s on-chain metrics project a bullish outlook as holders accumulate recent dips, and dormant wallets are on the move, all pointing to a recovery in the cards.
Bitcoin: New high of $100K or correction to $78K?
Bitcoin surged to a new all-time high of $93,265 in the first half of the week, followed by a slight decline in the latter half. Reports highlight that Bitcoin’s current level is still not overvalued and could target levels above $100,000 in the coming weeks.
Best Forex Brokers with Low Spreads
VERIFIED Low spreads are crucial for reducing trading costs. Explore top Forex brokers offering competitive spreads and high leverage. Compare options for EUR/USD, GBP/USD, USD/JPY, and Gold.