Summary
- A study commissioned by the European Parliament has proposed that all crypto assets should be treated as transferable securities by default.
- The study proposed a shift in the burden of regulatory compliance from national regulators to the entities that offer or facilitate trading of crypto assets.
- This proposal appears to be largely in line with established practice in the US, where the major regulatory agencies have hinted that only Bitcoin should be treated as a commodity for regulatory purposes.
European Parliament Study Proposes Classifying Crypto Assets as Securities
A study commissioned by the European Parliament has proposed that all crypto assets should be treated as transferable securities by default. This is due to rapid innovation in the industry and an overall lack of a comprehensive EU-level framework for cryptocurrency definitions within a reasonable timeframe and with acceptable costs. To avoid being classified as a security, an exemption can be obtained from a national competent authority (NCA).
Shift in Regulatory Compliance Burden
The study also proposes a shift in the burden of regulatory compliance from national regulators to those involved directly in crypto transactions. This would streamline regulation process and hold those involved accountable. This is largely similar to established practice in the US, where major regulatory bodies have hinted Bitcoin should be considered a commodity while other tokens are likely securities.
MiCA Regulations
The MiCA regulations were recently signed into law in EU, but researchers still expressed doubt regarding its ability to provide comprehensive definitions for cryptocurrency.