According to reports, Italy is thinking about raising the penalties for cryptocurrency offenses in an effort to lessen market manipulation.
Reuters has discovered that Italy’s government is considering more severe sanctions for individuals manipulating the cryptocurrency market, citing a draft decree.
If the proposed legislation is enacted, it will impose punishments for crimes like insider trading, unauthorized disclosure of insider information, and market manipulation that range from €5,000 to €5 million ($5,400 to $5.4 million).
With the responsibility of preserving financial stability and guaranteeing the smooth operation of markets, the decree names the Bank of Italy and market regulator Consob as the principal supervisors of cryptocurrency activity.
The Bank of Italy stressed the necessity of a robust and risk-based regulatory framework for stablecoins at the beginning of 2023 to prevent the worst-case scenario of a disruptive “run” on these virtual assets.
The financial regulator emphasized that stablecoin issuers, in particular, require regulatory attention because of their strong relationship with decentralized financing.
Subsequently, in advance of the European Union’s upcoming regulations for the cryptocurrency business, known as the Markets in Crypto-Assets Regulation (MiCA), Italy’s central bank declared the establishment of a supervisory framework.
However, it still needs to be clarified if this supervisory structure has been used. At the time, the Bank of Italy’s governor, Ignazio Visco, reported that surveys conducted by the central bank showed that, on average, only 2% of Italian households owned “modest amounts” of cryptocurrency and that Italian financial intermediaries had relatively little exposure to the cryptocurrency market.