CONSOB European Financial Regulator Halts Avacrypto Crypto Project, Bars All Activity
By and large Europe has been progressive and welcoming to the possibilities offered by the blockchain. Countries such as Switzerland and Malta have been attractive destinations with their continues improvements in the regulatory and commercial viability. Unfortunately, their neighbour Italy seems to have regressed.
In a statement released on the 14th of December, the regulatory authority of the Italian securities market, the Italian National Commission for Companies and the Stock Exchange, also known as Commissione Nazionale per le Società e la Borsa (CONSOB) published a statement delineating a “Cease and Desist Order” to a Crypto-related project in Italy.
What Has Happened?
As per news sources, Avacrypto, a crypto-currency related project, has been ordered to cease operations. It has been alleged that the firm has provided unauthorised investment services to the public. At the time of writing the company's website, www.avacrypto.com was down.
Earlier this month,the CONSOB had also targeted two other crypto projects. Bitsurge Token and Green Energy Certificates, both projects of a company called Avalon Life, had been suspended on suspicions of being fraudulent cryptocurrency investment schemes.
Law Or Improvisation?
At the moment, Italy is still working on its laws about digital assets. However, since 2017, the Ministry of Economy and Finance has been working on guidelines to define the new industry and provide some clarity.
At this time, Italian Law defines “virtual currency” as per a legislative decree and explains it as a:
“digital representation of value, not issued by a central bank or a public authority, not necessarily related to a fiat currency, used as a tool of exchange for purchasing goods or services, and electronically transferred, stored and traded.”
The Treasury department has since been looking to set out how businesses that are using digital currency should interact and report their activities to the governmental authorities. The main aim is to plug any loopholes that might be used for any unlawful activities, especially money laundering.
Exemplifying the governments undecided attitude was Fabio Panetta, deputy governor of the Bank of Italy. A few months ago he was asked for his views on crypto assets. He had stated that the central bank saw potential with these digital coins. In particular, he opined that these assets would
“ reduce costs in the production, transportation and disposal of cash.”
At the same time he added that when compared to the existing payment mechanisms on offer today, he did considered this advantage to be “at best unclear.”