Italian authorities are reportedly planning to strengthen regulation on cryptocurrency-related risks, including imposing high fines on market manipulation. According to a draft seen by the media, the Italian government intends to impose fines ranging from €5,000 to €5 million ($5,400 to $5.4 million) for insider trading, illegal disclosure of insider information, or market manipulation. The legislation is set to be approved by the Italian cabinet later on Thursday.
This plan is being implemented within the framework established by European regulatory bodies last year. The Bank of Italy and the market regulator Consob will serve as the institutions responsible for overseeing cryptocurrency activities to maintain financial stability and ensure orderly market operations.
Cryptocurrencies offer the advantage of enabling people to transfer funds globally without using traditional financial systems. However, this has also attracted the attention of regulatory bodies. Central banks and international organizations have warned that cryptocurrencies lack intrinsic value and pose risks to macroeconomic and financial stability.
In May of this year, the U.S. House of Representatives passed the Financial Innovation and Technology Act of the 21st Century (FIT21 Act). This milestone legislation in the cryptocurrency market signifies a potential shift in the United States’ attitude towards cryptocurrency assets.
The act will establish disclosure and registration requirements tailored for digital asset companies and transfer regulatory authority for this industry from the Securities and Exchange Commission (SEC) to the Commodity Futures Trading Commission (CFTC).
This move has been interpreted as positive for the digital asset industry, which has previously complained that the SEC was imposing traditional disclosure requirements that were not feasible for them.
However, it is worth noting that the FIT21 Act was passed by the Republican-controlled House of Representatives and will now face a challenging vote in the Democratic-controlled Senate. Furthermore, U.S. President Biden has expressed clear opposition to the legislation.
