Italian Regulator Suspends Crypto Investment Firm Tessline

11 June 2019

With Italy’s national regulator suspending Tessline, the investment firm behind liracoin, is this the dawn of a stricter stance on regulation within the cryptocurrency industry?

On 4th June 2019, Italy’s national securities regulator, La Commissione Nazionale per le Società e la Borsa (CONSOB), issued a notice suspending the investment firm Tessline and its cryptocurrency liracoin.

CONSOB confirmed that several entities and websites associated with both Tessline and liracoin have been ordered to terminate their violation of Article 18 of Italy’s Consolidated Law of Finance.

The notice states that the regulator has formally suspended all activities directly involved in the offer and promotion of the cryptocurrency for the next 90 days, plus the firm’s ability to promote any other investment products.

Tessline has been previously flagged by regulators for breaching compliance rules. In particular, the Central Bank of Ireland, who issued warnings about the unauthorised firm back in February 2019.

Seeing as this isn’t the firm’s first run-in with regulators, is this the start of a new, stricter and more transparent crypto industry?

After Tessline: the future of the crypto industry

Despite Tessline receiving multiple warnings before, the CONSOB’s decision to put their foot down now is undoubtedly a sign of things to come.

However, it’s not the first case of its kind.

In fact, CONSOB has issued a similar punishment to two other firms before who were allegedly involved in cryptocurrency fraud.

This happened around the same time as the regulator had to release a joint statement with the Financial Services Authority (FSA) in Malta over the operation of unlicensed crypto exchanges.

The truth of the matter is that CONSOB has been sending cease and desist notices since November 2018, with three firms accused.

This proactive stance established by the Italian regulator shows that they are serious about tackling suspected activity within the cryptocurrency sector.

Whether it’s exposing unlicensed exchanges, unregistered securities or any fraudulent activity, CONSOB is on a mission to make things more transparent for investors and businesses.

However, the hard work of CONSOB is merely just the beginning. According to the Business of Crypto’s recent report, the figure for cryptocurrencies that have been stolen from exchanges and scammed from investors surged by 400% in 2018 to around $1.7 bn.

Some of the most common methods of illicit activity in the sector include scam projects and hidden mining.

To put this into context, the same report from the Business of Crypto stated that the number of hidden mining reported cases grew by 4000% in 2018, with 4 million new threats identified in the third quarter of the year alone.

The CEO of CipherTrace, Dave Jevans, has gone as far as stating that “cryptocurrency criminal activity continues to evolve and accelerate.”

With this in mind, CONSOB’s swift decision to ramp up their push towards clamping down on these appalling crimes is a real positive step – not only for Italy as a crypto nation, but for the entire community too.

A more transparent and regulated market will fast-track mass adoption as well as encourage more bright minds to continue innovating blockchain technology into new uncharted territory.

How are you coping with the current regulations set by your place of business? If you feel like you need some expert advice on how to successfully navigate through the complex world of crypto regulation, get in touch with our team today.  

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