Regulation of Crypto-assets under EU and US Securities Law

No abstract available

The core subject of the thesis is the regulation and legal qualification of crypto-assets under EU and US securities law. The purpose of the thesis is threefold. First, to provide a snapshot of the situation de iure condito: in this respect, we discuss the current state of art of the regulation of crypto-assets by examining the regulatory interventions of lawmakers and the positions of the financial authorities. Second, to identify the most significant issues and regulatory challenges that the growing presence of crypto-assets in capital markets poses for regulators and market participants, and to provide a critical analysis of such issues. Third, with a de iure condendo approach, to propose potential solutions to the open regulatory issues which also contemplate the intervention of lawmakers and financial authorities. The analysis is structured as follows. We first provide in Chapter 1 an overview of the blockchain phenomenon, its main practical applications, and the potential interactions between law and blockchain. We also describe from a technical point of view how the blockchain works and how transactions are performed on a blockchain platform. Chapters 2 and 3 deal with the regulation and legal qualification of crypto-assets in the European Union. We first provide an analysis of the various classes of crypto-assets in order to assess their potential legal qualification as financial instruments under MiFID II, more specifically as (i) transferable securities, (ii) money market instruments, (iii) units in collective investments undertakings, and (iv) derivatives. We then discuss whether there are any classes of crypto-assets that might be subsumed under certain categories of non-financial instruments – namely (i) payment instruments, (ii) commodities, and (iii) negotiable (or credit) instruments – and can therefore be exempted from the EU regime applicable to financial instruments. We then try to identify a EU regulatory framework for the offering and exchange of crypto-assets qualifying as financial instruments, with particular attention to: (i) Prospectus Regulation (for those crypto-assets qualifying as transferable securities), (ii) MiFID II/MiFIR, and (iii) MAR. We finally discuss the potential future evolution of the regulation of crypto-assets in the EU and the current regulatory positions of certain EU Member States, concluding with an analysis of the recent MiCA proposal of the European Commission. In Chapters 4 and 5 we focus on the United States approach to the regulation of crypto-assets. In particular, we address the issues concerning the legal qualification of crypto-assets under US federal securities laws by analyzing the positions of the SEC and the CFTC. We then discuss the applicability of the existing US securities regulation to the offering and exchange of crypto-assets by identifying the most relevant issues in applying the registration and disclosure requirements of the Securities Act to token offerings. Our analysis will also cover the suitability of scaled disclosure regimes (such as Regulation A+, Crowdfunding, and Private Offerings) for ICOs and the applicability of the Exchange Act to crypto-exchanges. We finally discuss the existing regulatory gaps and try to identify potential solutions in light of the recent crypto-market developments. The conclusive remarks point out that, despite an increasing interest of regulators in setting up an effective legal framework for this new phenomenon, regulatory interventions and proposals have left so far too many issues open. In order to improve the quality of regulatory interventions, lawmakers and financial authorities shall adopt an approach that starts from the bottom and involves market participants from the crypto industry. In addition, given the cross-border nature of blockchain technology, it would be appropriate to have uniform international standards in the regulation of crypto-assets.