The European Securities and Markets Authority developed and released recommendations regarding ICO and crypto assets. Some of the assets are said to have a chance to be considered financial instruments in line with the European MiFID guideline.
The document represents research carried out by the authority in cooperation with other national bodies. The study included interviews, business patterns analysis as well as an attempt to determine the legal place of crypto assets.
"Crypto-assets raise specific challenges for regulators and market participants, as there may be a lack of clarity as to how the regulatory framework applies to such instruments," reads the document.
Besides, the authority used the previous crypto survey made by the National Competent Authorities (NCA) of Member States in the summer of 2018 in order "to better understand the circumstances under which crypto-assets may qualify as financial instruments in the EU."
ESMA stated in the report:
"The outcome of the survey highlighted an NCA majority view that some crypto-assets, e.g. those with profit rights attached, may qualify as transferable securities or other types of MiFID financial instruments".
The financial regulator recommended two categories for the crypto assets. In particular, the first category can be considered as financial instruments which comply with MiFID. At the same time, it was mentioned that financial instrument classification for the cryptos is subject to extra determination and specific requirements, which must be introduced.
Meanwhile, another European regulator European Banking Authority unveiled its own crypto assessment of " the applicability and suitability of EU law to crypto-assets."
In the summary of the report, EBA's Executive Director, Adam Farkas, commented:
"The EBA's warnings to consumers and institutions on virtual currencies remain valid. The EBA calls on the European Commission to assess whether regulatory action is needed to achieve a common EU approach to crypto-assets. The EBA continues to monitor market developments from a prudential and consumer perspective."
The regulator recommended the EU authorities to consider uniform crypto rules to protect local investors. Specifically, it called for an in-depth study of the guides and measures that should be taken in the EU.