The European Financial Regulator ESMA Budgets €1.1 Million Euros to Research Crypto-assets
The European Securities and Markets Authority (ESMA) has reportedly allocated €1.1 million to research and monitor crypto assets. The funds are part of the supervisory activities covering the watchdog’s 2019 annual work programme.
The paper sets out the key objectives regarding financial innovation and product risk analyses. The regulator plans for co-ordinated action to address the regulation and supervision of financial activities whilst providing advice to the EU institutions market participants or consumers. The paper also states the implementation of framework provided by the Markets in Financial Instruments Regulation (MiFiR) to enable product intervention powers.
ESMA currently overwatches trends in financial activities and retail investments. They help co-ordinate initiatives when monitoring the market. They will determine which exchanges are operating best practices, address concerns and compile appropriate action. An exchange selling Bitcoin may soon need to operate in accordance to MiFiR.
ESMA benefits from monitoring the market as it allows them to proactively address issues and concerns to determine whether they need to deploy their product intervention powers. These powers will allow the regulator to intervene in FinTech companies illicitly selling Bitcoin.
Under MiFiD II, ESMA will assess third-country venues and waivers issuing their advice on position limits and suspension depending on circumstances. The body will be able to exercise its authority on a business selling crypto but failing to provide transparency on trades.
MiFiD II was introduced on January 3 2018 to provide greater protection, efficiency and transparency for investors by providing legislative framework. Any organisation operating as an investment firm or trading venue for financial products is subject to MiFiD II. As the crypto space becomes more regulated, we are likely to see the need for organisations and businesses to adhere to certain regulations for buying and selling crypto as with other conventional markets.
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