Most governments set strict rules for crypto companies to set up shop there. However, this does not seem to be the case with Italy, which gave the green light for 73 cryptocurrency companies without careful scrutiny. Let’s see together what are the consequences of these lax authorizations.
A total of 73 permissions
Italy accepted the establishment of 73 companies in connection with cryptocurrencies on its territory. In itself, it’s not that amazing, except that the country has done it in very little time. Indeed, according to Coindesk, this was done between May 2022 and today. We can therefore ask ourselves the question about the quality of analysis of the files of these different crypto firms. New companies include industry giants like Coinbase, Crypto.com et Binance.
Thanks to the authorization obtained, cryptocurrency companies are now part of the country’s registry. As such, they are deemed to comply with Italian anti-money laundering (AML) laws and standards. The Organismo Agenti e Mediatori (OAM) launched on May 18 a register for “currency exchangers”. It also contains lists of credit brokers and financial agents.
Crypto-assets are a risky investment.
A careless authorization
Also according to Coindesk, the Italian authorities admitted that they were not not yet sure how the information was collected from cryptocurrency companies. On top of that, the government might not start doing it until late 2022.
Concretely, all digital asset companies that are currently in the registry are only subject tono control. That is to say, there is today no verification of funds flow. This despite the legal obligation to register with the OAM to continue their activities on Italian soil.
Lawyer Francesco Dagnino who handled some of these requests tells us: “Italy is probably, as far as I know, the jurisdiction with the simplest procedure. It’s just a recording“.
Indeed, in order to be accepted in the Italian register, just answer ten questions. Among them, there is the name of the company, the email address, the URL of the site, its tax code or all the points of service such as distributors of crypto currencies.
Finally, companies must provide the information “a registered office and, if different from the registered office, the administrative office, or a “permanent establishment” in Italy if their office is in another EU state”
A much less lax policy in neighboring countries
If we look at the other European countries, we see that they are much more scrupulous about the analysis of files. Indeed, the European Securities and Markets Authority (ESMA) recently declared that cryptocurrencies constitute a threat to the equilibrium of the financial markets. The argument put forward is the high volatility of digital assets and its lack of regulation.
Moreover, Christine Lagarde, the President of the ECB (European Central Bank), declared that the cryptos are a drag on central banks. For her, institutional banks are “an anchor point” for the European economy as cryptos are likely to lead to “an era of free banking“.
France has recently removed the PSAN (Digital Asset Service Provider) has the crypto company BYTEK. The digital asset platform was investigated and did not meet all the criteria of the Autorité des Marchés Financiers (AMF). This shows the difference in treatment between France and its Italian neighbour.
Across the Channel in the UK, the Financial Conduct Authority (FCA) has come under fire for its tough handling of new licenses for crypto companies. The government body replied “its rigorous measures are part of its standards similar to those of other jurisdictions.”.
Finally, in Japan, controls are intensifying. Regulators aim to stop the use of cryptocurrency for all criminal activities. Therefore, Japanese legislators are increasing the laws on cryptocurrency transfers in order to fight against money laundering.
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