Italy’s financial regulatory body, the Commissione Nazionale per le Società e la Borsa (CONSOB), has ordered three cryptocurrency startups to shut down after it found that they have been providing unauthorized cryptocurrency investment services in the country.
After receiving complaints from the public, the regulator started investigating the platforms. It discovered that the three—Richmond Investing, Crypton Ltd., Eagle Bit Trade—along with Alessandro Brizzi, who represents Cryptoforce Ltd., were not authorized to promote their products in the country.
The first company, Richmond Investing, reportedly failed to register as a financial intermediary which violates the Consolidated Law on Finance (TUF). According to the CONSOB release, CryptoForce, a company specializing in Proof-of-Stake (PoS) mining also promoted a cryptocurrency called “Crypton.” On the other hand, Brizzi was advertising CryptoForce on Facebook. The last company, Eagle Bit Trade also offered supposedly unauthorized “trading packages” to Italian investors. All these activities violated the regulations, according to CONSOB.
CONSOB has suspended the companies for 90 days. Recently, authorities in Italy have been tightening up crypto regulations, following the European Union’s footsteps in correcting the crypto space.
The Italian watchdog earlier published a warning against a list of financial companies that are listed as trading frauds by other European financial regulators. In September, Bruegel, a Brussels-based think tank, called on European Union authorities for more inspection on how cryptocurrencies were allocated to investors.
CONSOB advises investors in Italy to check its registers before making any investment with a broker. They should be keen especially if the broker or company uses aggressive marketing techniques.
So far, Italy does not have a formal framework for crypto business. However in March, the Italian Ministry of Economics announced the creation of a law that would classify the use of cryptocurrencies. The law also lists service providers related to digital currencies.
As reported by Finance Magnates, authorities in Italy have not banned financial institutions from dealing with cryptocurrencies. They are instead recommending that they wait until formal regulations are introduced.
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