ESMA Attempts to Create ‘Sound Legal Framework’ for Crypto Assets

Asia Blockchain Review
January 24, 2020

2020 will see new regulation surrounding cryptocurrencies and related products imposed by the European Securities and Markets Authority (ESMA), whose focus for this year is to make market participants acknowledge and prepare for risks from digitization. ESMA’s recently published Strategic Orientation for 2020-2022 includes the authority’s planned activities to regulate digital assets.

Crypto Regulation Becomes Focus for EU Agencies

ESMA published the Strategic Orientation for 2020-2022 Thursday to lay out its future focus and reflects its expanded responsibilities and powers. The ESMA’s priorities list notes that EU capital markets are facing new risks from digitalization, and expresses its intention to make market participants acknowledge and prepare for these apparent risks.

“The dangers of cyberthreats to the financial system as a whole and a sound legal framework for crypto-assets are increasingly becoming areas of focus for ESMA together with the other ESAs, the ESRB, the ECB and the European Commission,” the document reads.

ESMA’s Attempts to Regulate Cryptocurrencies

ESMA has been trying to regulate cryptocurrencies and securities for many years, developing rules for initial coin offerings and derivatives around the space. In January 2019, ESMA published its Advice to the European Union (EU) Institutions – Commission, Council and Parliament – on initial coin offerings and crypto-assets. The Advice clarifies the existing EU rules applicable to crypto assets that qualify as financial instruments, and proposes possible ways to deal with the rising issues in cryptocurrencies and related products.

ESMA said it will continue to actively monitor market developments around crypto assets while cooperating with national competent authorities in the EU and global regulators.


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