As interest in the cryptocurrency sector grows, European regulators are raising concerns about the shortcomings of the current regulatory framework, which could jeopardize investor safety.
Regulators' Proposals for Improved Oversight
In response to identified shortcomings, regulators from France, Austria, and Italy have proposed to enhance oversight over the largest crypto asset providers. They suggest granting the European Securities and Markets Authority (ESMA) direct oversight, which could help unify rule application and reduce regulatory disparities among member states.
Loopholes and Investor Safety
Regulators are also concerned about loopholes that allow EU intermediaries to send orders to offshore platforms. This could threaten investor protection due to the lack of necessary regulatory measures. Closing these loopholes is essential to ensure better investor protection.
Benefits of Centralization for Tokens
To enhance legal transparency and simplify cross-border token offerings, a centralized filing system for token white papers is proposed. This step will help eliminate inconsistencies in procedures between member states. One proposed measure is mandatory independent cybersecurity audits for obtaining or renewing MiCA licenses.
Strengthening oversight in the cryptocurrency sector through stricter rules would not only protect investors but also maintain the European Union's competitiveness in the global digital asset market.
