Report: EU to Discuss Further Crypto Regulation Amid Concerns About Lack of Transparency
E.U. finance ministers will reportedly hold a meeting on the challenges posed by digital assets and the possibility of tightening regulations.
Economic and financial affairs ministers from the European Union’s (E.U.) 28 member states will reportedly hold an informal meeting on the challenges posed by digital assets and the possibility of tightening regulations, Bloomberg reported August 29.
According to a draft note seen by Bloomberg, participants will discuss a general lack of transparency and the potential for cryptocurrency to be used for tax evasion, terrorist financing and money laundering at a September 7 meeting in Vienna, Austria.
The European Securities and Markets Authority (ESMA) has previously warned customers about Initial Coin Offerings (ICOs), citing a lack of investor understanding and problems with unregulated financial activities. The ESMA also noted that unregulated exchanges are unprotected due to their existence outside of global financial regulations, which means that customer losses from an event like a cyberattack would not be covered by E.U. law.
Despite previous warnings from E.U. financial watchdogs, the document obtained by Bloomberg says that ICOs “have established an effective and efficient way to raise capital.” The document reportedly also states that ICOs could help integrate capital markets in the E.U.
The E.U. Fifth Anti-Money Laundering Directive came into force on July 9. Measures within the directive set a new legal framework for European financial watchdogs to regulate digital currencies. The new rules enact stricter transparency requirements directed at the use of “anonymous payments through prepaid cards” and “virtual currency exchange platforms” for the purposes of money laundering or terrorist financing.
In March, the ESMA strengthened requirements for Contracts For Differences (CFDs) in cryptocurrencies. In accordance with the introduced rules, investors must have enough funds to cover at least half of a contract value upon opening, changing the leverage limit of cryptocurrency CFDs to 2:1 from 5:1 at opening.