ESBG says crypto assets should be properly legally defined and regulated
See the position paper
BRUSSELS, 5 December 2018 – Innovation brought by the
development of crypto-assets and Initial Coin Offerings (ICOs)should not allow
a new era of fraud, deception, money laundering, tax evasion and financial
instability, ESBG argues in a recently
published position paper on the regulatory treatment of Initial Coin
Offerings and crypto-assets. The association representing 1000 savings and
retail banks in Europe notes that problems
associated with ICO and crypto-asset innovation are also the very reasons the
banking sector is exceptionally regulated.
ESBG Managing Director Chris De Noose said:
“The rapid development of these new practices and assets seriously challenges
the European Union’s legislative framework and the level playing field between
financial markets participants that it aimed to create. Furthermore, it allows
for the re-emergence of well-known risks that find new ways to develop, such as
money-laundering and financial stability, and gives new ones the opportunity to
flourish, such as cyber-risks.”
To address the issues presented in the introductory
part of its position paper, ESBG suggests that the following actions be
market venues for virtual currencies and tokens. These venues would fight the new money-laundering opportunity created
while allowing for the development of investor protection in places where it is
currently virtually non-existent.
Crypto assets should be properly legally defined and classified among
existing or new categories. There is need to ensure a level of investor protection that would be
at least on par with the one that investors in regulated assets benefit from.
It is also important to depart from this situation where National Competent
Authorities are taking diverging views. On this point, ESBG welcomes ESMA’s
SMSG Own Initiative Report on Initial Coin Offerings and Crypto-Assets
published on 19 October.
A regulatory framework for ICOs must be defined. Regulatory arbitrage within the EU should not be
tolerated. A specific legislative proposal for a regulation with a dedicated
impact assessment should be put forward by the European Commission.
See the paper