Title: Taming the “Wild West” of Finnish Crypto Assets Market: The Need for EU Regulation

Amidst growing concerns over financial crime in the crypto assets sector, Finance Finland, a leading Finnish financial sector association, is advocating for the uniform international regulation of the EU cryptoassets market. Mika Linna, the association’s Head of Financial Crime and Cybersecurity, explains the importance of a harmonized regulatory framework for maintaining regulatory consistency and combating illicit activities.

The Risks of the “Wild West” Crypto Market

According to Linna, the crypto assets sector, with its significant growth in popularity, remains a ‘wild west’ with operators not subjected to comprehensive regulation and oversight. He stresses the importance of regulating similar financial services uniformly:

“The lack of adequate regulation and supervision can lead to operators who are unable or unwilling to uphold their lawful obligations, creating an uncertain and potentially harmful market environment.”

Closely Aligning Crypto Regulations with the Traditional Sector

Finance Finland believes that the national implementation of the Markets in Cryptoassets (MiCA) framework should align closely with the regulations applicable to the traditional financial sector. Operators must not only be subjected to regulations but also proper supervision and background checks to ensure lawful practices.

Preventing Crypto Assets Investment Fraud

Data from Finance Finland’s member banks reveals that crypto assets-related investment fraud accounted for over €8.2 million in losses in Finland during the first half of 2023. Given the high-risk nature of the sector, as indicated in official reports on the prevention of financial crime and terrorist financing, Linna emphasizes the need for adequate resources to carry out new supervisory obligations:

“Resources that are both quantitatively and qualitatively sufficient would enable authorities to address fraudulent activities effectively. This would also benefit banks, who are often unfairly targeted when their clients fall prey to crypto asset scams.”

Combating Financial Crime in the Crypto Market

Linna is optimistic about the new regulation’s impact on financial crime. He asserts that:

“There has been a clear rise in crypto asset-related financial crime, so it’s essential to subject the issuance, exchange, and utilization of these assets to comprehensive international regulation.”

Stay Informed on Crypto Assets Regulation

Keep learning about the regulation of the crypto assets market by exploring other articles on this topic.