Consob is regulating ICOs and crypto-assets: we have reached the turning point


And yet it moves. Things actually “are moving” about crypto-assets regulation in Italy. The Consob’s decision to publish a consultation on ICOs, the Initial Coin Offering, and on crypto exchange is a little test which has great symbolic value. The Commissione Nazionale per le Società e la Borsa, the Italian securities market regulatory authority, is behaving gingerly but it is clear that the purpose is to make an organic law by Parliament. All stakeholders (suppliers, savers and investors)  a period of 60 days to develop a debate about the definition of crypto-asset and the trade and offer measures. In mid-April we could have a preliminary feedback at a public hearing. After the consultation has been closed, the findings will be shown to the government to decide what to do, avoiding strong provisions which would paralyse a growing industry.

Consob is minded to intervene on the basis of an ad hoc mechanism, in line with the position of the ESMA (European Securities and Markets Authority) because it believes these activities have different characteristics in relation to traditional ones. A very different direction compared to those undertaken abroad, where some countries preferred to avoid the legislation while others qualified crypto-assets as actual financial instruments. The matter needs a a united front. The independent authority specifies that the consultation, made up of 15 questions, is carried out «pending the establishment of an European shared orientation about the legal characterisation of the legal characterisation of  crypto-assets».

Many countries of the Old Continent have already done so. Last year, Malta set the precedent with the entry into force of three laws covering respectively the establishment of an ad hoc authority; blockchain, DLT and smart contracts; token offerings and exchanges. The Swiss Financial Authority published guidance containing a classification of tokens and the Federal Assembly has recently passed a motion in favour of cryptocurrency regulation.

The French financial market regulator opted for a solution similar to the one in Italy: a consultation on ICOs which has contributed to the legalisation of blockchain and financial transactions using Distributed Ledger Technology. The Germany’s Federal Financial Supervisory Authority has authorised the issuance of a security token and a plan for DLT is now widely expected to do this summer. Finally, Russia is close to adopting digital asset regulation and making offshore to attract greater amounts of investment.

Consulcesi Tech, leading blockchain and cybersecurity company, has decided to take part in the consultation by making its experience available to the Consob. Many times we called for a clear regulatory framework because we believe that legal certainty favours investment also on the part of foreign players. With our consultancy work for numerous countries of central Europe – and not only them – have made the greatest contribution to creating legal framework.

The active participation required by Consob is welcome because it is a guarantee for all stakeholders. The attention it has shown to investors is a change of pace in accordance with the statements made by new President Paolo Savona in 2017: «Economists would say that money creation with cryptocurrencies will turn from supply induced to demand induced; that is, it will be induced by money demand, no longer by offer on the part of central banks under state control».

This paradigm shift presents a challenge to international financial institutions, who have demonstrated a growing openness for ICOs, token, blockchain and cryptocurrencies in recent months. We particularly refer to the International Monetary Fund chaired by Christine Lagarde. She told about national government issued cryptocurrencies just a few months ago. On May 19, when consultations will be closed, we will find out if Italy decides to take full advantage of this opportunity. We are aware this is only the first step on a long road to modernise the country.