The EU Is Taking Another Look at Regulating Crypto

(Bloomberg) -- Cryptocurrency traders and issuers of virtual currencies are in for a fresh round of scrutiny from European politicians.

Finance ministers from the European Union’s 28 member states will discuss a host of challenges posed by the growing popularity of digital assets and whether rules should be tightened, according to a draft note prepared for a Sept. 7 meeting in Vienna that was seen by Bloomberg News. They include a general lack of transparency and also crypto’s potential to be misused for money laundering, tax evasion and terrorist financing.

The Austrian government, which currently holds the EU’s rotating presidency, didn’t immediately return calls seeking comment on the document.

Regulators around the globe are racing to police one of the biggest investment manias in recent memory, ranging from a massive crackdown in China to an exchange-licensing regime in Japan. In Europe, wild price swings on virtual-currency markets have sparked warnings from authorities, who pointed out that current EU laws don’t offer any protection to investors. The European Commission, the EU’s executive arm, has pledged to monitor developments and determine the need for further action together with other agencies.

Regulators in Europe are also keen on harnessing the new technologies unleashed by digital currencies, according to the undated document. Initial coin offerings “have established an effective and efficient way to raise capital,” it said, adding that this development could also help integrate capital markets in the bloc.

©2018 Bloomberg L.P.