Category Archives: European Securities and Markets Authority

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EU Watchdog Looks to ICOs to Formulate Appropriate Regulation

The European Union’s securities watchdog has a new initiative to develop suitable regulations for initial coin offerings (ICOs) and it requires investigating every single ICO.

The European Securities and Markets Authority (ESMA) looks to be following the lead of the US on this front, which has notably tight restrictions on the industry that saw the Securities and Exchange Commision (SEC) shutting down a number of ICOs this year, including that from Dallas-based AriseBank and Centra Tech.

Chair of ESMA Steven Maijoor told the European Parliament’s economic affairs committee that he is interested in finding out how ICOs fit into existing financial regulation, and what the implication will be for the general capital raising sector.

As he says, however, this task has been particularly challenging as each initial token sale can differ in nature, and not all of them fall under the category of a ”financial instrument”. Those that do, fall under the current regulatory framework but those that don’t, raise the question ”what do we do with those ICOs that are outside the regulatory world’,’ as Maijoor puts it.

His colleague Andrea Enria, chair of the European Banking Authority, previously told officials that he thinks the correct path for action is to avoid stifling innovation, proposing that ICOs should be allowed to prevail without any influence from the EU.

However, he now says that the outcome is not as he hoped, predominantly because the warnings that the EU issued to retail investors regarding cryptocurrency assets have not been sufficient to raise awareness. Regulators across Europe have tried to inform potential crypto customers that there is no safety net should their investment not go as they expect, but apparently, this message has been largely lost.

US SEC chairman Jay Clayton thinks that the way to combat this is to regulate the sale of new tokens as securities are, but admits that not all will fall into this category. Bitcoin and Etherum have been decided as not falling into the category of securities.


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Liechtenstein Union Bank AG to Launch Fiat Backed Crypto

A bank in tiny Liechtenstein has announced its own security tokens and fiat backed cryptocurrency.

Liechtenstein Union Bank AG is to issue Union Bank Payment Coin (UBPC) and suggests that it is planning to become “full-service blockchain investment bank”.

The Liechtenstein government has a very pro stance on new technology and has suggested in the past that it wants to provide sensible but cohesive blockchain regulations in order to create a stable legal environment that will help further the country’s innovation within the sector.

Under pressure from other European nations to change the status quo in Liechtenstein following the global economic crisis, the county started to look at digital currency at about the same time that Bitcoin was beginning to become a byword in financial markets.

In the meantime, crypto-to-crypto trading hasn’t been regulated and exchanges are beginning to make a home in the country. Once the blockchain legislation goes through, further developments are predicted to be swift. Patrick Bont, the country’s top regulator explains:

“Because we are so small, blockchain companies can move a lot faster here than other countries… You can call us for a meeting on Monday morning and we can meet you for lunch on Tuesday or Wednesday. Very few other places can do that consistently.”

The Union bank has said that the launching of the new UBPC coin is a further step to becoming a blockchain-friendly nation and that the coin will be backed by major currencies such as the Swiss franc. The bank’s chairman Mohammad Hans Dastmaltchi was positive about the new release:

“Our goal is to become the world’s first blockchain investment bank and to provide tangible solutions which help drive efficiencies, reduce cost base and open up new revenue opportunities for our customers and intermediaries alike.”

Both Binance, new to the tiny principality, and Union Bank were highly complimentary about the government’s open stance on blockchain and cryptocurrency. Under the most recent guidelines from the European Securities and Markets Authority (ESMA), the first fully compliant cryptocurrency exchange is now open for registration.


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First Fully Compliant Crypto Exchange Under New European Framework to Open in Liechtenstein

Under the most recent guidelines from the European Securities and Markets Authority (ESMA), the first fully compliant cryptocurrency exchange is now open for registration in Liechtenstein.

ESMA’s new framework MiFID II/MiFIR was introduced in January 2018 to offer consumers an extra level of protection. The Markets in Financial Instruments Directive (2004/39/EC) has been applicable across the European Union since November 2007.

It is a cornerstone of the EU’s regulation of financial markets seeking to improve their competitiveness by creating a single market for investment services and activities and to ensure a high degree of harmonised protection for investors in financial instruments. The new updated legislation (MiFID II) was introduced to further strengthen investor protection and improve the functioning of financial markets, making them more efficient, resilient and transparent.

Liechtenstein-based cryptocurrency exchange opens in full compliance with these new European regulations, the beta version reported to be the first of its kind.

The exchange promises to trade in Bitcoin, Bitcoin Cash, Litecoin, and Ripple, offering users feedback rewards via the platform’s “Need Help” widget and a “Beta Feedback” option. Users sending in feedback stand to win an iWatch as part of the prize draw.’s CEO, Luka Gubo feels that the platform adhering to the new EU guidelines will give greater credibility to cryptocurrency use in general. He said:

“This is an ideal way for regulators across Europe to recognize cryptocurrencies as a new asset class and put in a regulatory framework.”

It is commonly felt in the industry now that sensible and clear regulation will impact on the crypto ecosystem as a whole, and this is reflected in the global move towards regulation.

Liechtenstein’s prime minister recently stated he wanted his country to be at the forefront of the digital age, suppressing any burdensome regulations on blockchain technology. Its aim is to provide its citizens with sensible but cohesive blockchain regulations.

The Ukrainian government is another European nation leading this drive towards sensible cryptocurrency and blockchain regulation. The head of the Ukraine National Securities and Stock Market Commission, Timur Khromaev, has recently suggested that the way to move forward is to recognize cryptocurrencies as tokens and financial instruments, which will then necessitate government regulation and licensing rules, all of which is currently absent in Ukraine.

This, he suggests, would be “an important first step in building a consensus among government agencies and financial regulators”.


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