The CNMV Warns of the Risk of Crypto Assets Despite Its Regulation

The issuance of crypto assets will begin to be regulated in December 2024 with the entry into application of the MiCA Regulation. With this European regulation, entities that offer services related to these products will also be regulated.

This standard will require the establishment of a new supervisory framework for these products, which must be applied with a homogeneous supervisory approach at the European level. Despite this regulation, the National Securities Market Commission (CNMV) warns of the risks of investing in these assets.

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The CNMV customer service telephone service remains unawarded due to lack of offers

The supervisor warns that, although it is a regulated investment, the risks still exist and above all he sends this message to retail investors, since when MiCA comes into operation, many well-known entities can market this product to their clients. For this reason, Rodrigo Buenaventura, president of the CNMV, explained that one of the institution’s objectives in 2024 will be the training of the team and retail investors.

For the CNMV, MiCA is complex due to its technological components and is based on new business models and financial proposals that evolve rapidly. During 2023, general training was offered to all CNMV technicians, so in 2024 specific and intensive training on cryptoassets and the MiCA Regulation will be carried out for the technicians who will be responsible for supervising the different areas of this regulation.

To this end, a specific and long-term internal program will be organized in order to delve deeper into these matters for the future supervision of cryptoasset markets and service providers (CASP) by the CNMV.

In parallel, working groups will be organized with the sector to achieve practical training aimed at the application of the MiCA Regulation, which will allow the CNMV to know in detail the operation of the CASP , along with the issuance processes of cryptoassets and the different business models.

“Protection of the retail investor, focused on ensuring that the marketing of products clearly warns of the associated risks, the correct incorporation of sustainable finance into the financial sector and the new supervisory powers derived from the regulations on cryptoassets and on cybersecurity,” Buenaventura explained in the presentation of the CNMV’s 2024 Activity Plan. The institution assures that the regulation of these assets will increase interest in them , so we will have to be more vigilant.

The CNMV activity plan published this Tuesday explains that in the field of cryptoassets, the risks come, among other issues, from the very nature of these assets and their possible use in illicit activities in a non-existent regulatory framework or in development. At the same time, its presence in investors’ portfolios and the growing interest on the part of providers in its offer and services is undeniable (the BME Clearing market infrastructure itself was authorized last year to expand its clearing services and include in its offering futures on indices linked to bitcoin and Ethereum).

At this time, in addition to monitoring possible risks to the financial stability of these assets, the sector is at a key regulatory moment in Europe, that of the implementation phase of the MiCA Regulation. In this case, it is essential that all market participants and the authorities themselves prepare appropriately in this period prior to the full application of the regulation.

The president added that the regulation enters at the end of this year, but the objective of the CNMV is to anticipate and carry out a series of activities to “try to grease the process as much as possible. “In addition, he pointed out that the goal is to soften the processes of approaching regulated entities to see the demand of those that want to be regulated to issue and “prepare ourselves for this.”

This new regulation (the MiCA regulation) involves several actions, among which the preparation for the supervision of market abuse in the negotiation of cryptoassets subject to the regulation stands out; management for the receipt of documentation for emissions; or interaction with the sector to anticipate interest in the provision of cryptoasset services.

Likewise , the CNMV pointed out that attention must be intensified to risks that arise outside the supervisor’s powers, such as in the provision of cross-border services or services intentionally designed to evade supervision, which will require collaboration with other supervisors. While the complete regulatory framework is built, the CNMV will maintain its policy of issuing warnings and alerts about the risks of these products and controlling their advertising, which will continue to be unregulated or supervised in 2024.

While the MiCA regulation arrives, the price of bitcoin is around $57,000 (52,458 euros) for the first time since the end of 2021 after being supported by investor demand through exchange-traded spot bitcoin ETF funds, as well as by MicroStrategy’s purchases of 3,000 bitcoin for 155 million dollars (142.72 million euros). Bitcoin has improved its value by 33.9% since the beginning of 2023, recovering from a collapse of 64% in 2022, although it is still below the historical maximum of almost 69,000 dollars (63,535 euros) reached in November 2021.

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First published in EL INDEPENDIENTE. A third-party contributor translated and adapted the articles from the originals. In case of discrepancy, the originals will prevail.

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