As countries all over the world are mulling over the exact regulatory framework required for cryptocurrency, the chairman of the European Securities and Markets Authority (ESMA) has made it known that he supports a regulatory framework for the benefit of investors, RollCall reports.
Like many who worry that consumers may be suffer from market volatility and fraudulent activity, ESMA Chairman Steven Maijoor said at the FinTech Conference 2019:
Where crypto-assets do not qualify as financial instruments. We are concerned that the absence of applicable financial rules leaves consumers exposed to substantial risks.
Certainly, crypto assets are quite different from traditional asset classes, and lawmakers will want to put sensible regulation in place that will prevent malicious behavior, while also promoting innovation and entrepreneurship.
The ESMA chairman also feels that regulation should encompass ICOs, and that cryptocurrencies should fall under Anti-Money Laundering (AML) laws.
With the former, the idea is that crypto assets that offer dividends should receive strict laws governing it, while the latter wants to eliminate money laundering in crypto-to-crypto conversions and crypto-fiat conversions.
Maijoor’s sentiment is in keeping with other regulators in many parts of the world, including the United States, which has not yet formed clear regulation on the market, though it has said that it has made the examination of the digital assets space a priority for 2019 and has considered changing legal definitions.
In October 2018, ESMA began examining ICOs on a case-by-case basis. Now, however, it looks like they would like to take a much broader and comprehensive approach to regulating what is a rapidly developing market.