– a guide written by Francesco Dagnino, Angelo Messore and Carlo Giuliano
Lexia Avvocati has provided Lexology with a reference guide about the cryptocurrency legal framework in Italy: regulation; use of cryptoassets for investment, financing, trading and payments; cryptocurrency mining, blockchain and future developments on the topic.
Italy is a challenging environment where to discuss digital transformation and new technologies. The alternation between slowdowns and actions aimed at pushing innovation forces pioneering companies to keep themselves constantly updated on possible changes of the law.
In the guide we provide a general legal framework on the current situation regarding cryptocurrencies and blockchain in Italy.
Cryptoassets & Blockchain Guide: what will you find
General Legal and Regulatory Framework in Italy
Despite the absence of a comprehensive legal framework in Italy concerning cryptoassets and their transactions, there are rules applied to virtual asset service providers (VASPs). In this guide we provide an overview about:
- recent regulatory changes and VASPs definition,
- how a VASP can enroll itself in the VASP Register at OAM (Organismo Agenti e Mediatori),
- what services a VASP can provide according to VASP Decree,
- other rules a VASP can be subject to according to its nature and classification.
Government policy, regulatory authorities and penalties concerning cryptocurrencies
Given that in Italy there is no government authority specifically dedicated to cryptoassets regulation and supervision, it is important to define:
- the general government approach towards crypto services, which is showing an increasing interest and might lead to relevant changes in the near future,
- all institutions and authorities currently involved in cryptoasset-related activities and transactions,
- penalties that can be imposed by regulators on VASPs and on entities offering cryptoassets, including causes and consequences.
Cryptoassets for investment and financing
What are cryptocurrencies according to the Italian regulation?
Cryptocurrencies are tokens that are used as virtual currencies and are subject to the Italian rules on VASPs .
What is a virtual currency according to the Italian regulation?
A virtual currency is a digital representation of value that is not issued or guaranteed by a central bank or a public authority. It is not necessarily attached to a fiat currency, but is accepted for purchase or investment purposes. It can be transferred, stored and traded electronically.
Regulatory threshold and investor classification
Given these premises, there are pure cryptocurrencies (such as Bitcoin, Ether, etc) that are easier to define, whereas other types of tokens need to be evaluated on a case-by-case basis, in order to understand the regulation under which they fall under (for example if they qualify as financial instruments or products). In the guide we give a general overview on cryptoassets and crypto investors classification criteria to understand how they should be legally treated.
Financial instruments and products: rules and restrictions
For each of the following financial operations, instruments or products, we give possible classifications and we identify rules and restrictions, if any:
- ICOs: initial coin offerings,
- STOs: security token offerings,
- crowfunding, airdrops and marketing activities related to cryptoassets,
- anti-money laundering and know-your-customer compliance,
- sanctions and Financial Action Task Force compliance.
In the guide we give to companies and individuals dealing with cryptoasset trading some general guidelines about:
- rules and restriction on the exchange of fiat currencies and cryptoassets,
- duties of the exchanges, alternative trading systems and secondary markets,
- regulations about entities operating in crypto trading: e.g. custodians, broker-dealers,
- rules on decentralised exchanges, peer-to-peer transfer of cryptoassets, foreign exchanges and taxe regulation.
Cryptoassets used for payments
For everyone operating in the cryptocurrency field, it is important to be aware that the Italian government has not recognized any cryptoasset as a lawful form of payment or issued its own cryptoassets. However, certain financial institutions are considering whether to offer cryptocurrency accounts to their clients.
Cryptocurrency mining and blockchain technology
We give insights on the current legal status related to cryptocurrency mining in Italy and future developments. We provide an overview on the possible requirements and rules for blockchain technology and smart contracts applied by DAOs (decentralized autonomous organizations).
We discuss what we should soon expect from Italian Government on the topic.
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