Consob Cracking Down on Foreign Brokers
The increase of offshore brokers is growing drastically in Italy. Prior legislation for digital currencies in Italy prompted a grey area for offshore brokerages. However, the Italian Cryptocurrency Market has started to become regulated by government entities. Consob, the Finance Securities Regulator for Italy, has blacklisted five websites. These sites managed FX and Cryptocurrency products. The banned sites come after Consob agreed to implement the same product intervention measures created by the European Securities Markets Authority. This meant that selling binary options to retail clients or contracts-for-difference with high leverages became illegal for offshore entities. At the time, Consob noted that a large number of foreign brokers operate with dysfunctional services, which could harm Italian traders. Going forward, these brokerages and firms will be blacklisted.
The Blacklisted Brands include:
There is a secondary list implemented by the Italian regular. The Warning List from Consob displays the identities of brokers dealing with digital currency assets. These apply to firms operating with underlying coins or contract-for-difference derivatives. All brokers that don’t have legal permissions to provide these services in Italy are displayed on the warning list. However, these sites aren’t officially banned from the jurisdiction. Despite these flaws, Consob plans to implement new regulatory measures that will limit the number of offshore brokers by a minimum of 50%. Ultimately, this creates a safer environment for retail investors.
Right now, Consob doesn’t have their own legislation that’s been approved by the government. Even with the product intervention measures implemented, there are limited options on how Consob can enforce these rules. Subsequently, the highly volatile instruments operated by these offshore brokers are still in operation today. The Italian Securities Regulator spoke on the growing issue by stating, “Digital Representation of citizens is an issue that must be resolved by central banks and public authorities. It would create a viable market where coins could be purchased for goods and services. The government needs to step in with regulation to represent their people.”