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Italian Regulator Suspends Suspicious Crypto-Related Ventures

Italian Regulator Suspends Suspicious Crypto-Related Ventures

In a newsletter published today by the Commissione Nazionale per le Società e la Borsa (CONSOB), the securities market regulator in Italy has issued a cease and desist order to two cryptocurrency-related platforms.

As the chief regulator of the Italian securities market, CONSOB has deemed it fit to suspend the activities of Bitsurge Token and Green Energy Certificates for 90 days as a “precautionary measure” in line with the infringement of Article 99, Paragraph 1, Letter b of the Consolidated Law on Finance.

Both firms were allegedly offering unregistered securities or outrageous investment benefits for sale, and advertising their products to Italian residents via an online platform. For Bitsurge Token, the website was the medium of communication while the Green Energy Certificates used its Facebook social media page to advertise its product.

The Italian regulator has taken action against Bitsurge Token and Green Energy Certificates under two official resolutions viz: Resolution no. 20741 and Resolution no. 20740 respectively. This was published on the Italian regulator’s website on 12 December.

According to the resolution, the regulator identified offers from the Bitsurge Token operators providing an investment return of up to 7% minimum upon buying the Bitsurge token unit of USD 40 minimum with a lifecycle of 90 days on the ROI. Further, there were also “token contracts” offers detailed in the resolution, noting that the platform was offering investment cap of USD 1,000 up to USD 25,000.

On the other hand, the second offender Green Energy Certificates project was offering an investment opportunity “to protect the rainforests from deforestation” through blockchain while guaranteeing “a compensation of 6% per annum… spread every month at 0.5%”, the resolution reads.

The regulator emphasized: “Those wishing to make an offer to the public shall publish a prospect beforehand.” And these two companies were in violation of the financial laws of Italy, noting that the absence of a prospectus and a lack of prior notice to CONSOB presented a “well-founded suspicion about the promotion of a public offer of financial product” to the Italian citizens.

In light of the resolution, a 90-days embargo has been placed on both operators, with an appeal position to the Regional Administrative Court of Lazio within 60 days from the date of communication.

The Italian financial regulator continues to show steadfastness in protecting the investors within its borders against fraudulent cryptocurrency related services. Not too long ago, in a joint statement with Malta’s Financial Services (MFSA), both regulators issued a warning to an unlicensed cryptocurrency exchange dubbed OriginalCrypto operating within their region.

 

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Italy Flexes Regulatory Muscle with Non-Compliant Crypto Exchanges

Italian regulators, the Commissione Nazionale per le Società e la Borsa (CONSOB), is tightening its grip on cryptocurrency firms who don’t comply with the commission’s regulations.

Three companies have been cited in a CONSOB statement as receiving suspensions from operating their services, two companies receiving three-month suspensions and one banned from operating for an indefinite period spanning months.

Richmond Investing was the first to come under the regulator’s microscope, principally for failing to meet Italian laws regarding the operation of cryptocurrency online trading platforms. Richmond failed to register to as a mediator offering finance-related services contravening the principal Consolidated Law on Finance (TUF).

Another company, Crypton Limited, was penalized for contravening another law applying to cryptocurrency trading, accused of making inappropriate promotions and advertisements. Crypton was hit with a 3-month operating suspension, as was Eagle Bit Trade for apparently offering wildcat trading packages to Italian investors.

Cease and desist actions are not uncommon as a global repositioning is underway regarding cryptocurrency regulation with most countries now re-examining how they plan to regulate the space for both the protection of the public. Also, there is a growing need to offer greater clarity to exchanges and fintech companies regarding operating protocols across jurisdictions.

Italy is also in this position as it continues to work towards establishing a formal framework for cryptocurrency exchanges to work within, including, like many other nations, addressing digital currency tax laws as they apply to the public.

Italy recently announced that it was about to enter the European Blockchain Partnership, an organization formed to promote blockchain technology between member states.

In doing so, Italy became the 27th nation to sign the agreement since its conception earlier this year in April. The partnership has grown from 22 nations since its launch. Initially, the EU had launched an EU Blockchain Observatory and Forum, subsequently investing more than EUR 80 million in blockchain projects. A further EUR 300 million has been allocated over the next four years.

 

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