As crypto grows bigger and bigger day by day, the European Union takes active movement to be prepared for potential problems. The E.U.’s economic and financial affairs members have announced that there will be numerous informal meetings if necessary in order to prevent potential crimes and loss as it is considered to be lack of transparency. For the following step, there will be a meeting on 7 of September in Vienna, Austria. Participants will discuss about a general lack of transparency and probable tax evasion, money laundering and terrorist financing with cryptocurrency.
The European Securities and Markets Authority(ESMA) has repeatedly advised to be prudent about initial coin offerings(ICOs) due to the fact that investors are short of understanding and uncontrolled financial activities. Furthermore, uncontrolled exchanges in the global market cannot be protected by E.U. law.
Even with continuous warnings from E.U., according to the report from Bloomberg, ICOs “have established an effective and efficient way to raise capital.” The report also includes the message that ICOs could assist integration of capital markets in the E.U.
In order to cut off possibilities of money laundering or terrorist financing with anonymous payments with prepaid cards and digital currencies, stricter rules have been applied by the E.U.’s 5th Anti-Money Laundering Directive since July 9. Moreover, the ESMA intensified requirements for Contracts For Difference(CFDs) in cryptocurrencies. Likewise, investors must hold sufficient funds to be able to hold minimum half of a contract value upon opening which draws out the result of changes in the leverage limit from 5:1 to 2:1.
Author: Jieun Lee