ECB Wants To Provide Protection To Crypto Users Under Gambling Laws
The European Central Bank (ECB), in its official statement, has suggested that crypto consumers should be protected in line with the laws related to online gambling.
The crypto collapse of the previous year has been extreme for the whole crypto market. Hence, it has compelled regulatory bodies around the world to make consider modifying their regulatory policies.
ECB Executives Recommend Crypto Monitoring According to Gambling Laws
An ECB executive board participant suggested in the blog post that the industry of cryptocurrency should be scrutinized stringently. The ECB executive named Fabio Panetta has noted that the investment in crypto assets could be treated just like gambling. As per him, this should be done as there is no economic value of any crypto.
Investor trust has slightly decreased because of the epic crash of FTX and the ECB is of the view that stringent laws are required to shield investors. The executive has categorized digital assets as speculative investments and unsupported assets while keeping in view their extremely volatile nature. He also referred to their connections with illegal operations like sanctions evasion, tax evasion, and money laundering.
As Panetta remarked, the previous year was significant in the crypto market’s unraveling. He asserted that 2022 was the year when initially investors had fears that they would miss out on the promising opportunity in the crypto market.
Nonetheless, he added, at the denouement of the year, the scenario was flipped and the investors became fearful that they won’t be able to get out of it after getting in.
Panetta additionally stressed that while implementing the respective regulations, the regulator should consider the presently implemented laws related to gambling. He mentioned that some methods should be made for the detection of the issues created by the crypto assets. These take into account terror financing, sanction evasion, as well as money laundering.
As Panetta puts it, the regulatory agency should endeavor to effectively make adequate regulations and implement them. He specified that if this does not happen efficiently, the wider market of traditional finance will get extreme effects.
The present occurrences within the world of cryptocurrency have had the least effect on the conventional financial market. That has become the reason why the space has been permitted to break down.
Executive Mentions Risks Associated with Crypto
Nonetheless, notwithstanding the choice of permitting the market to self-exhaust, crypto can create prominent problems due to the risks linked to it, he added. Crypto assets are not supported, thus they are completely speculative.
Thus, the regulations will treat them analogous to gambling through the implementation of analogous taxes as well as the measures related to customer protection.
The regulatory endeavors will require a worldwide reach and this will shield against lobbying endeavors that will play a significant role to make the industry responsible and accountable. In the words of the executive, the highly important thing in the regulation says that the crypto clients should not be abandoned to take their assets’ full responsibility.
He moved on to say that even in the case of investment, selecting digital assets is not a good choice. He claimed that there are no insurance projects for digital assets and they are always exposed to diverse kinds of risks related to the cyber and IT space. He emphasized that because of no protection schemes available, no compensation is received for the investments which are lost once.