According to the new regulation of Italy, the government has decided to increase surveillance on the crypto market. Specifically by introducing new measures to counter market manipulation and other financial crimes.
According to the latest draft policy, the penalties for these crimes could range from 5,000 to 5 million euros (equivalent to 5,400-5.4 million dollars). Let’s check all the details below.
Serious sanctions for market manipulation, the new crypto regulation of Italy
As expected, Italy is preparing to strengthen oversight of crypto markets as part of its compliance with the European Union’s regulatory framework for markets in crypto-assets (MiCA).
Under the new regulations, Italy will step up oversight of digital asset markets to combat and punish insider trading and market manipulation schemes.
The decree provides for sanctions ranging between 5,000 and 5 million euros (5,400-5.4 million dollars) depending on the severity and scope of the regulatory violations.
The regulatory framework MiCA of the European Union, which was first approved in 2022, presents blockchain companies with difficult choices.
Meanwhile, decentralized financial protocols (DeFi) must decide whether to fully decentralize their networks or comply with the anti-money laundering and identity verification (KYC) regulations of the framework.
Fully decentralized networks are exempt from MiCA reporting requirements. However, these protocols cannot meet MiCA’s definition of a sufficiently decentralized network.
This is due to the use of foundations and other intermediaries that help moderate decentralized communities.
This implies that these DeFi protocols must be completely decentralized or accept users to submit authentication data, a difficult proposition for many network participants.
Changes in the business models of exchanges
The centralized exchange Binance recently informed its European customers that it is switching to a model that categorizes stablecoins as authorized or unauthorized.
So model in line with the MiCA framework, and that users gradually adopt the new system.
Richard Teng, CEO of the exchange giant, also noted that Binance is not removing these stablecoins from spot markets. However, this only limits its availability to European users for certain products.
Richard Teng, CEO of the exchange giant, also noted that Binance is not removing these stablecoins from the spot markets. However, this only limits their availability to European users for certain products.
In the same way, Uphold made changes to comply with the EU regulatory review and announced the delisting of six stablecoins.
Among these Tether (USDT), Frax Protocol (FRAX), Pax Dollar (USDP), Dai (DAI), TrueUSD (TUSD) and Gemini Dollar (GUSD).
Despite the growing regulatory pressure in Europe, many experts believe that stablecoins have a promising future. Furthermore, they argue that they may be able to prevent debt crises caused by the excessive issuance of fiat currencies.
The former Speaker of the United States House of Representatives, Paul Ryan, recently stated that stablecoins can help mitigate the shortcomings of the US economy due to the debt-laden US dollar.
Even Jeremy Allaire, CEO of stablecoin issuer Circle, expressed optimism about the future of stablecoins. In particular, he said that he believed it would represent 10% of the money supply in the next decade.
New rules for the stability and security of crypto-assets
The European Banking Authority (EBA) has recently released a comprehensive package of technical standards and guidelines in line with the Markets in Crypto-Assets (MiCA) regulation.
Thus providing a clear guide to asset-referenced tokens (ART) and electronic money tokens (EMT) across Europe.
The package addresses six key topics, ranging from stress testing programs and asset reserves to recovery plans. According to MiCA, ART are tokens backed by assets such as commodities, real estate or a diversified basket of assets.
On the contrary, the EMT maintains a stable value as they are anchored to fiat currencies and used for payments, similar to stablecoins.
The authority has outlined a series of guidelines for token issuers, emphasizing the need to have sufficient financial resources (own funds) to cover potential risks.
Parameters are also established to identify whether an issuer presents a higher degree of risk, which would require an increase in equity reserves.
The EBA guidelines specify the procedure and the timing within which issuers must adjust their funds to 3% of the average reserve of assets classified as significant.
The implementation plan must be submitted within 25 working days and compliance must be achieved within a maximum of six months.
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