Regulation
The new law strengthens risk surveillance
Italy is tightening its grip on the cryptocurrency market with a new draft decree that will be approved this week. The move signals a tougher regulatory approach aimed at curbing manipulation and strengthening oversight, in line with the European Union’s broader push for cryptocurrency regulation.
Millionaire fines for market chaos
According to Reuters reports, the proposed decree takes a zero-tolerance stance towards misconduct in the cryptocurrency industry. Activities such as insider trading, market manipulation and illegal disclosure of sensitive information could cost offenders hefty fines ranging from 5,000 euros to a staggering 5 million euros (around $5,400 to $5.4 million) .
This financial hammer blow is a testament to Italy’s commitment to protecting investors and promoting a fair and stable crypto ecosystem.
Italian Central Bank and Consob join forces
The decree assigns the responsibility of overseeing crypto activities to two key players: the Bank of Italy and Consob, the country’s market regulator. This “dual approach” aims to achieve a dual objective: maintaining financial stability and ensuring the orderly functioning of the market.
The Bank of Italy’s experience in financial matters will be fundamental to prevent systemic risks, while Consob’s experience in regulating traditional markets will be invaluable in addressing the specific challenges of cryptocurrencies.
Total crypto market cap at $2.29 trillion on the daily chart: TradingView.com
A badge of trust for encryption service providers
This new decree is based on the existing legislation implemented in January 2022. And from the following year, the Ministry of Economy and Finance (MEF) imposed that all cryptographic service providers operating in Italy, both domestic and foreign, must register at the Agents and Mediators Organization (OAM).
This supervisory body, responsible for supervising financial activities and credit intermediation operations, operates as a doormanensuring that only reliable suppliers can serve Italian customers.
Dual purpose
The OAM registry serves a dual purpose. First, it promotes transparency by making information about registered suppliers readily available. Secondly, it strengthens anti-money laundering (AML) compliance, thereby reducing the risk of illicit activity within the Italian cryptocurrency market.
While the long-term impact of the new decree remains to be seen, it is clear that Italy is taking a proactive stance towards regulating the crypto sector.
The increased oversight, combined with heavy fines and a focus on registered service providers, suggests a future in which the Italian cryptocurrency market prioritizes stability and security over rampant speculation.
The question for both investors and cryptocurrency companies is whether this new environment will foster innovation or stifle its growth.
Featured image of Pexels, TradingView chart