IMCO

Money, Money, Money: As cryptocurrencies and non-fungible tokens (NFTs) are becoming more popular in the investment market, the demand for additional security measures and supervised transactions has appeared.Given that investment scams and theft are still thriving in this under-legislated sector, how can the EU protect consumers and investors, particularly those with an NFT portfolio?

Committee on the Internal Market and Consumer Protection (IMCO)

Money, Money, Money: As cryptocurrencies and non-fungible tokens (NFTs) are becoming more popular in the investment market, the demand for additional security measures and supervised transactions has appeared. Given that investment scams and theft are still thriving in this under-legislated sector, how can the EU protect consumers and investors, particularly those with an NFT portfolio?

Submitted by: Mohamed Bashier (NL), Simon Broady (NL), Alisar Daba (NL),  Jelle (NL), Leonard Hendriks (NL),  Egon Van Casteren (NL), Farah El Yaghmouri (NL), Chaired by: Alice Maffoni (IT)

The European Youth Parliament,

  1. Overseeing the recent adoption of security measures such as the Regulation on the Markets in Crypto-Assets (MiCA), the General Data Protection Regulation (GDPR), and the Travel Rule Regulation;
  2. Recognizing the work of the European Securities and Markets Authority (ESMA) in the advertisement of the new possible approach to the field of crypto; 
  3. Noting with concern that 23% of cryptocurrency transactions between 2009 and 2017 were associated with fraud, 
  4. Emphasizing the urgent need for comprehensive legislation and security measures to regulate crypto transactions,
  5. Concerned by the lack of user identification methods, 
  6. Deeply alarmed by the presence of counterfeit items on the market enhancing the chance of fraud in the digital marketplace;

The committee,

  1. Affirms the European Central Bank (ECB) to augment user identification methodologies by establishing an all-encompassing central digital database overseeing all cryptocurrency and NFTs1 transactions;
  2. Further affirms the ECB to mitigate crypto investment scams by introducing punitive measures, such as economic sanctions and prohibiting market participation, in response of the absence of mandatory tracking of crypto transactions in the previously mentioned database;
  3. Calls upon the Directorate-General on Economic and Financial Affairs (DG ECFIN) to alleviate fraudulent activities by prohibiting any cryptocurrency or NFT transactions which are not duly registered with ID identification and linked bank accounts on the aforementioned digital database;
  4. Urges the ESMA to raise awareness about the associated risks of cryptocurrencies and NFTs by establishing a dedicated assistance page featuring contacts and guidelines for how to  proceed if encountering  fraudulent activity or anomalies;
  5. Recommends cryptocurrency exchange platforms, such as Bitpanda or Bitstamp, to enhance awareness of risks and fraudulent activities within the cryptocurrency market by adopting a compulsory tutorial approved by the ECB.
  1. Non-Fungible Tokens (NFTs) are unique and irreplaceable digital assets that represent ownership or proof of authenticity of a specific item through blockchain technology. ↩︎