Italy reportedly set to strengthen regulation of cryptocurrency risks

According to media reports, Italy is planning to take measures to strengthen the regulation of the risks associated with cryptocurrencies, including imposing hefty fines on market manipulation. The draft seen by the media shows that the Italian government plans to impose fines ranging from 5,000 to 5 million euros (5,400 to 540,000 dollars) for insider trading, illegal disclosure of insider information, or market manipulation. This regulation is set to be approved by the Italian cabinet later on Thursday. The plan is being implemented within the framework established by the European regulatory authorities last year, with the Italian central bank and the market regulator Consob set to oversee cryptocurrency activities to maintain financial stability and ensure orderly market operations. The advantages of cryptocurrencies lie in their ability to facilitate international remittances without relying on traditional financial systems, but this has also attracted the attention of regulatory authorities. 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), a landmark cryptocurrency market legislation that signals a potential shift in the U.S. approach to cryptocurrencies. This legislation will tailor disclosure and registration requirements for digital asset companies and transfer regulatory oversight from the Securities and Exchange Commission (SEC) to the Commodity Futures Trading Commission (CFTC). This has been interpreted by the market as a positive development for the digital asset industry, which has previously complained about the SEC imposing traditional disclosure requirements on them, a practice that was deemed impractical. However, the FIT21 Act was passed by the Republican-controlled House of Representatives and will face significant challenges in the Democrat-controlled Senate. In addition, U.S. President Biden has expressed clear opposition to the bill.