Cryptocurrency in Italy
As an American lawyer and Italian enthusiast, I sometimes get to write blog articles that relate to both of my worlds. In my class action firm, for example, we are investigating cryptocurrency fraud and seeking to help clients who have lost money investing in the cryptocurrency market. Cryptocurrency has not been regulated like traditional securities traded on the stock market, and as a result, there has been an increased risk of fraud and various scams. Fraud victims have fought back against cryptocurrency companies, alleging, in part, that initial coin offerings should have been registered with the government (SEC) since cryptocurrency constitutes a security within the meaning of federal securities laws. This issue is now before many federal courts in the United States.
But cryptocurrency, without centralized control, is international. How the United States handles cryptocurrency, however, is not necessarily how other countries handle the digital asset. How about in Italy?
A recent study by Statista reveals that 8% of Americans and 8% of Italians own cryptocurrency. Given that digital currency is a relatively new phenomenon, and different research sites use different statistical analyses, it’s no wonder why some sites present different results. For example, according to Datalight, the United States has 22.26 million users of cryptocurrency, compared to Italy with only 1.59 million users. In another example, Coin Idol reports that the United States comes in second place with Bitcoin users, with Italy in fourth, indicating that 15.3 percent of the globe’s Bitcoin-accepting stores are in Italy.
With regard to the legality of cryptocurrency, there are similarities in both nations. In 2015, the US Commodity Futures Trading Commission defined the treatment of digital currency as a commodity. Yet, other cryptocurrencies have been deemed a security. The distinction between a commodity and a security is critical for US cryptocurrency investors. The nature of the asset determines whether the Security & Exchange Commission or the Commodity Futures Trading Commission has regulatory jurisdiction. If a cryptocurrency is a security, then its creators can be liable for holding an illegal, unregistered coin offerings. Most cryptocurrencies in the US are now considered a security. See the CNBC article here.
Italy, on the other hand, has not made specific regulations for cryptocurrencies. To protect investors, Italian authorities have been establishing regulations, but they have been ambiguous and vague, particularly with respect to tax laws. See Unbank’s article, Understanding Cryptocurrency Regulation in Italy.
Lately, Italian authorities have begun cracking down on cryptocurrency companies in an effort to control illegal cryptocurrency entities. Just this month, securities regulators suspended a cryptocurrency investment firm for violating statutory law of Italy’s securities regulator, La Commissione Nazionale per le Società. See the article published in Coin Telegraph.
Additionally, the Italian Senate Committee on corporate affairs passed legislation which can bring in a positive change, and help stop fraudulent activity. The legislation is aimed to create a framework for the regulation of all financial and IT firms which are involved in financial transactions via electronic means, including cryptocurrency.
Whether it is in the United States or Italy, both countries recognize the potential for abuse and criminal activity in blockchain technology, and thus both countries are now spending time regulating the cryptocurrency markets, making it safer for users. While we hope that cryptocurrency regulation continues, making its use safer for investors and enthusiasts, the fact remains that people have been harmed in the recent past by various criminal and fraudulent schemes. According to CNBC, $1.1 billion in cryptocurrency was stolen in the first half of 2018.
If any of my readers lost money in cryptocurrency schemes, my law firm is investigating the details behind the losses. Feel free to reach out (email@example.com).
May 08, 2019
May 06, 2019