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Europe's SMA Chairman Supports Cryptos


04 Mar 2019   #Bitcoin

Europe's SMA Chairman Supports Cryptos - But He Wants Them Regulated ASAP


The crypto trend continues to slowly but surely conquer the world, and according to recent reports, digital currencies might soon start seeing regulations in Europe. If this comes to pass, cryptocurrency rules might soon become standard.

Recently, the European Securities and Markets Authority Chairman, Steven Maijoor, stated that cryptocurrencies are here to help investors, instead of hinder them. However, he also points out that there is a large concern regarding the absence of financial rules and regulations. This lack may leave crypto users exposed and vulnerable to numerable risks.

Cryptocurrencies need to be regulated


In his recent speech, Maijoor argued that digital assets might be on the wrong side of the Europe’s laws regarding securities. Maijoor then pointed out how US states have different opinions regarding cryptocurrencies, as well as cryptocurrency companies, and whether or not they should have licenses for money transmissions. Meanwhile, direct crypto transactions are not being monitored by the federal government, provided that they are not fraudulent.

He then insisted that cryptos need to be regulated, which is a stance that most jurisdictions in Europe share as well. This is something that Malta has been working particularly hard on, due to the eruption of crypto usage that the country has seen. So far, however, it is not particularly clear what the country is doing in order to attract more business in this field.

Maijoor uses this example to point out that a single approach to dealing with digital assets would not fit everyone.

Additionally, he stated that organizations should raise money in return for crypto, but that the new rules are necessary if all participants are to be protected. This would allow the use of cryptocurrencies for the purpose of making a purchase, as they would provide consumption or utility rights. Of course, this would also include Bitcoin (BTC), which might serve as a means of exchange.

When it comes to the situation in the US, the country's regulator, the SEC, views most cryptocurrencies as securities, even if they are registered as utilities. The regulators felt like they needed to take action when investors started viewing these alleged securities as speculative investments. The SEC deemed it to be necessary to react, as it aims to prevent additional risks that would endanger consumers.

Violations of federal securities laws are, therefore, seen as a crime that the SEC can charge the violators for. This also means that the US government itself needs to get more involved with the issue.

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