MiCA and TFR at the finish line


The path to final approval of the European regulation on the crypto-asset market (the now famous MiCA or MiCAR) has been extremely long and laborious, but it is now at the finish line, having been scheduled for discussion and subsequent vote in the European Parliament on 19 and 20 April, respectively. 

By contrast, much quicker has been the path to finalizing the contents of another important regulation affecting the anti-money laundering sphere, namely the regulation on the transfer of funds (TFR), whose discussion and subsequent vote in the EU parliament is calendared for the same days as MiCA, but whose process was begun much more recently.

The spotlight has been on MiCA for some time: especially on the Web, specialized and non-specialized news outlets have been following its complex formation process and constantly reviewing its contents as they were implemented, every step of the way.

It is a highly articulated body of legislation, with as many as 126 articles, lengthy preambles (the so-called “recitals”) and numerous annexes. In short, it is a small European code of cryptographic assets.

Comments and controversies on the new regulations: MiCA and TFR

Many comments spread by insiders, lawyers and practitioners in the financial world, but also by authors and bloggers in the crypto world, some of them improvised and lacking specific expertise, especially in the legal field.

According to some, this is a regulation that was “already born old.” Others fundamentally object to the intent to regulate what was born not to be regulated. 

Still others welcome this set of regulations as balanced and not overly stifling. 

In short, there is something for everyone: from the “old school” maximalists, staunch supporters of libertarian or crypto anarchist ideals, to the proponents of positions at the opposite extreme, conservative, pushing hard for the world of crypto finance to resemble the world of conventional banking and finance as much as possible. All, passing through a range of intermediate nuances.

To pretend to comment on such an extensive body of law here would be unrealistic and probably also not very useful, not least because it would involve overly superficial analysis.

Nevertheless, a few considerations are nevertheless worth making.

Objective considerations and analysis

The first is that the regulation was born with a very explicit mission, stated in its very title: namely, to regulate the specific market sector of digital assets. 

In this perspective it brands a set of rules that, in the intentions of the European legislator, firstly aim to pursue the objective of creating a framework with equal access rules, to protect freedom of competition, and secondly aim to establish a set of protective barriers to protect users, consumers, investors or savers that they may be.

The pursuit of these objectives is entrusted first and foremost to the definition of certain peremptory conditions for access to the market of services related to crypto – assets, in which it is required that entities that in particular propose their projects to the Union market (and aim to raise economic resources from the public) must meet specific requirements.

These requirements, in addition to ensuring that operators access the market on equal terms for all (and this aims to ensure fair forms of competition) are at the same time also a guarantee tool for users, because they aim to oust from the market entities that lack the characteristics of professionalism and reliability and are unable to offer a minimum threshold of asset guarantees.

In addition, to protect investors and savers, certain behavioral obligations are set for market participants. Thus, first and foremost, offering services, promotion and solicitation to subscribe to them, must be manifested through white papers that must comply with a number of minimum content requirements and some essential disclosures.

This, of course, goes in the direction of transparency about the services and projects presented.

However, this whole set-up, in order to work effectively, must revolve around a set of clear and unambiguous definitions that assume relevance for enforcement purposes.

Now, one may or may not agree with this type of architecture, depending on whether one is more or less enamored with the romantic idea of a free, anonymous, uncontrollable and incompressible payment system. However, it is necessary to come to terms with reality.

And the reality is that there is still very little of that original romantic idea in the world of crypto finance, as long as mass adoption is not achieved, while speculative intent remains largely prevalent.

Moreover, the fact that a code of conduct is imposed on operators and that they are required to have even minimum capital guarantees in order to address the market and to initiate underwriting solicitations, does not sound too bad, if one thinks of how many have seen their investments fade away (beyond cases of outright scams), in the Wild West of the many fanciful initiatives, beautiful on paper but unrealizable or lacking in market in practice, or simply, managed in a totally unreasonable manner.

There is still plenty of uncertainty: DAOs and NFTs being left out of MiCA and TFR

Now, remaining at a more properly technical-legal level, what draws particular attention are the definitions and, more generally, the rules delimiting the scope of the regulation.

NFTs remain outside this perimeter, as Article 4 of the regulation excludes from the obligations imposed on crypto assets, those that are characterized as “unique and not fungible with other crypto assets.” 

In addition, in the stages of the regulation’s formation process, the definition of DAO, originally present in early drafts, was removed.

But that of the delimitation of the scope of the regulation, with respect to which definitions play an essential role, may be a problem for several member states, and for some of them, given that the regulation is a self executing source, which does not require transposition in order to find direct application in the law of the states of the Union, it will be necessary to harmonize the rules of domestic law.

In Italy, for example, the definitions of virtual currency contained in Legislative Decree 231/2007 (anti-money laundering law) and that of crypto – asset, contained in the recent tax legislation dedicated to the matter, are broader and end up including, for example, also NFTs, i.e., those that for European law are considered unique crypto – assets not fungible with other crypto – assets. 

Admittedly, the European regulation and the Italian laws referred to are different subject areas (competition and market regulation, anti-money laundering, and taxation, respectively), but it is to be expected that these divergences could create significant alignment problems in application.

Hence, in order to understand what the actual impact of MiCA may be, it will be necessary to arm ourselves with patience and wait to see how it is “put on the road.”

The case of self-hosted wallets

For sure, however, what could have an immediate impact on the economic fabric of the crypto world is the funds regulation that introduces a number of stringent restrictions on crypto – asset transfers with a value above 1,000 euros originated from self-hosted wallet addresses.

The regulation imposes the so-called travel rule.

This means that an obligation is imposed on service providers to verify the identity of the person who arranges a crypto-asset transfer.

Therefore, in the case of transfers in excess of 1,000 euros from self-hosted wallets, platforms must prevent the amounts from being made available to beneficiaries until the identity of the originator wallet holder has been established and, where this is not possible, return the funds.

Now, this kind of restriction is undoubtedly bound to wreak some havoc among cryptocurrency holders who have chosen to hold their funds on non-custodial wallets and will result in significant conditioning for users to use the services of centralized exchanges.

This legislative choice, in addition to generating tangible effects in the immediate term also raises a number of doubts at the conceptual level and, in essence, at the level of the individual freedoms of EU citizens.

First of all, because, for the sake of combating money laundering, it deals a blow that could prove fatal to the very concept of decentralization and disintermediation, where it effectively places every individual or entity in the Union with no other alternative but to turn to an intermediary to dispose of their assets and resources in the form of crypto-assets.

This, among other things, would also result in an overall alteration of the market for services in the crypto-asset world, much to the detriment of competition protection principles.

Secondly, because it introduces a kind of negative presumption about the legitimate provenance of funds merely because they are transferred from a self-hosted wallet: as if to say that anyone who chooses to hold their assets on self-hosted wallets has something to hide or should be presumed, by default, to be the result of some illegal activity.

A choice that, even in light of the recent chain of sensational crashes of centralized exchange platforms, frankly seems more than legitimate.

Not surprisingly, it is precisely on these kinds of considerations that in the United Kingdom, the adoption of provisions of a similar tenor was stopped by the Treasury itself.

In short, while many people have raised a thousand questions and issues about MiCA throughout its long gestation, it would seem that the provision that truly threatens to do the most damage to the fabric of the crypto-economy is instead the TFR.

FAQ on crypto regulation and taxes



In several previous articles in this column, we have had the opportunity to examine the text of the law analytically and outlined the main changes.

To this day, however, despite the newly introduced regulations, many are still wondering about various aspects of the relationship between their crypto-assets and the Italian tax authorities.

This is one of the reasons why, especially when doing frequent crypto-asset trading, it is always a good idea to be supported by professionals (lawyers or accountants) with specific expertise on the taxation of crypto assets, a subject dense with complexities and nuances that are often difficult to frame.

To support operators and users, the business and tax consulting firm AllCore S.p.A. has created a special division called Crypt&Co. (cryptandco.com), in which a team of professionals in the tax, legal and accounting fields is made available to clients to offer targeted services of this kind, related to the management and legal and tax implications of crypto assets.

It is precisely due to the fact that doubts about the tax aspects remain many, that today we review the most frequent questions that are asked by users and operators and try to provide a concise answer.


  1. What are the main changes introduced by the budget law?
  2. What is meant by capital gains?
  3. Specifically, how is capital gain calculated?
  4. No tax up to 2000€: what is it?
  5. Do the rules of the budget law operate retroactively? For example, if I held cryptocurrencies in the past, if I did or did not cash out, if I declared or did not declare my holdings, what happens?
  6. If I pay for goods or services in crypto, what does that entail tax-wise?
  7. What happens tax-wise in case of inheritance?
  8. In the event that I buy crypto at €10,000 and donate when the value has risen to €20,000, how is the transaction taxed?
  9. How does the stamp duty on cryptocurrency work?
  10. How are NFTs framed on the tax side?
  11. What happens if I don’t declare and pay taxes?
  12. Is it possible to remunerate an employee in cryptocurrency? How does it work?


1. What are the main changes introduced with the budget regulation?

With the new budget law, first and foremost, reference is no longer made to the definition of virtual currencies (which the Internal Revenue Service previously referred to as part of its interpretive acts), but to the broader concept of crypto-assets.

The consequence is that the tax provisions introduced by the law may find application to a broader range of crypto assets than those that find use for the purpose of mere means of payment (i.e., as so-called bidirectional virtual currencies): thus, there is the possibility (or the risk) that the tax provisions may affect tokens of various kinds, including those NFTs that, while not having a function of a strictly monetary nature, could fall within the scope of application of these rules.

Another important change, is that the taxation on capital gains remains, along the same lines as previously identified by interpretation in the interpretative acts of the Internal Revenue Service (i.e., 26%), but with respect to that interpretation the mechanism that triggers the tax changes.

Prior to the enactment of the Budget Law (again according to the interpretation of the IRS) capital gains were considered taxable if during the tax year the taxpayer held cryptocurrencies with a countervalue exceeding […] euros, for at least seven business days in a row. Today this threshold is not relevant and instead the tax is triggered if the capital gains generated during the tax year exceeds 2,000 euros, regardless of the total amount of cryptocurrencies (or rather, crypto assets) held during the year.

2. What is meant by capital gains?

In principle, capital gain is the difference between the purchase value and the realizable value, from the sale or conversion, of crypto assets.

Commonly, capital gains are generated when you cash out (thus, conversion from crypto to fiat), however, by law all acts of disposition for consideration are qualified as equivalent to cash out. Thus, for example, if I purchase a good or service from a crypto-accepting operator, the associated countervalue of the transaction is equivalent to a form of cash out.

Prior to the enactment of the Finance Law, there was some doubt as to whether crypto transactions (example Bitcoin exchange for USDT) could generate capital gains or not. Today, the law stipulates that crypto-to-crypto exchange or conversion transactions, but which have the same characteristics and functions, do not result in capital gains, but are tax neutral.

It remains to be determined on a case-by-case basis whether or not it can actually be said that the exchanged crypto assets have the same characteristics and functions.

Which, given the generic wording of the provision, could be questioned in some cases.

3. Concretely, how to calculate capital gains?

According to the current interpretation, the so-called LIFO (Last In First Out) method is applied. This means that if I made several purchases during the year (e.g., I first purchased a certain number of cryptocurrencies at 9,000 euros and later, I purchased an identical amount at a purchase value of 10,000 euros), if I then resell that same number of cryptocurrencies for a consideration in FIAT (national currencies) of 15,000 euros, my capital gain will have to be calculated on the difference from the second purchase (10,000 euros) and not from the first (9,000 euros).

The capital gain, therefore, will be 5,000 euros and the tax rate will be applied on that amount.

So the capital gain calculation is always and still done on the last executed purchase value.

This mechanism, of course, gets complicated where you have a much longer and more complex history of transactions over time (because perhaps you have traded between crypto assets, and so on).

4. No tax up to €2,000: what is this all about?

As anticipated, the new taxation mechanism introduced with the finance bill only takes into account capital gains above €2,000. Essentially, it is a small no-tax area in which small crypto investors, as long as they obtain gains of up to 2,000 euros per year in capital gains, do not generate taxable income and are relieved of the relevant taxes.

This principle applies in the opposite direction to capital losses.

If these do not exceed the 2,000 euro threshold, they are irrelevant for tax purposes. Any excess capital losses generate a tax credit and can be offset during the year and up to 4 years thereafter against the taxpayer’s accrued income.

5. Do the Budget Law regulations operate retroactively? For example, if I held cryptocurrencies in the past, if I did or did not cash out, if I declared or did not declare the holding, what happens?

If I held cryptocurrencies in the past but did not cash out, I am not subject to capital gains tax.

However, the question arises as to whether the holding of crypto assets should be included in the declaration, for the purpose of so-called foreign asset monitoring (the famous RW form).

Although this is a questionable thesis, the guidance of the Italian Tax Agency (Agenzia delle Entrate) prior to the enactment of the Budget Law was that the holding of cryptocurrencies had to be included in the RW form always and in any case.

With the Budget Law, this generalized obligation was finally explicitly established.

The rule also stipulates that if for the past I have not declared the holding of cryptocurrencies in the RW form I have to amnesty the years in arrears with a 0.5% year on the assets held.

Furthermore, the law, again for the past, stipulates that if I cashed out, i.e., converted crypto to FIAT currency or purchased goods or services or even transferred these crypto assets to third parties (events all comparable to cashing out), and these transactions generated taxable capital gains, I will have to rectify my situation by paying 3.5% on the capital gains generated.

6. If I pay for goods or services in crypto, what does this entail on the tax side?

As mentioned above, transferring to a third party for payment of goods or services is one of the transactions for consideration that are assimilated to cash out. So it can generate capital gains even if I do not convert to FIAT currency.

This countervalue is what corresponds to the purchase value of the good or service, as long as it actually generates a capital gain.

So, for example, if I buy a Bitcoin for €15,000 and this Bitcoin over time comes to be worth €18,000 in countervalue, if I then use that Bitcoin to pay for the purchase of an asset worth €18,000, in that case I will have generated a capital gain of €3,000.

Keep in mind the issue of crypto-to-crypto conversion, which according to the new text of the law does not generate taxable capital gains as long as the crypto-assets exchanged or permutated with each other can be said to possess the same characteristics and functions.

7. What happens tax-wise in case of inheritance?

In case of inheritance, the purchase value must be declared within the inheritance deed.

The inheritance tax is calculated on this value, and this becomes the initial value. The proof of purchase cost in this case is the responsibility of the taxpayer and not the IRS.

So, for example, if I receive cryptocurrencies worth €5,000 in inheritance, I will have to prove and document the original purchase value paid by the person who bequeathed them to me.

If I fail to prove this original cost, an original value of zero is assumed and I risk having to pay taxes on the entire value.

It is important to keep in mind that the Finance Act offers the opportunity for a tax-freeing of the value of all crypto assets owned as of 1 January 2023 and paying 14% of their value over 3 years.

The same applies in the case of a donation, where the purchase cost incurred by the donor is taken as the basis for taxation.

8. In case I buy a certain amount of cryptocurrencies at €10,000 and I donate them when their value has risen to €20,000, is the transaction taxed?

No, the donation is not taxed, and the tax burden, even on a future capital gain, is on the person receiving in donation.

9. How does the stamp tax on cryptocurrencies work?

The Finance Act, in addition to the substitute tax on capital gains, imposes the payment of a stamp tax on all crypto assets held, equal to 2×1000 of the entire crypto assets held.

This is, in essence, a kind of wealth tax.

However, the application rules have not yet been defined by the Italian Tax Agency, but this does not detract from the fact that since the current tax year, you are also required to pay this particular tax.

10. How are NFTs framed in terms of taxation?

As mentioned earlier, the Finance Act adopts the definition of crypto-assets, which is broader than the notion of virtual currency previously considered by the Tax Agency for tax purposes, the definition of which is essentially contained in Legislative Decree 231/2007 (anti-money laundering law).

This new category, as it is defined, could actually include NFTs, which are simply tokens with the particular characteristic of non-fungibility.

This may be a problem, because the tax law seems to disregard the practical purpose of tokens.

In fact, an NFT can perform functions that can be very different, even though they are frequently used to embed works of art or other intellectual works (pieces of music, videos, etc.).

Which leads to the need to coordinate the tax regulations on crypto-assets with those on the tax treatment of works of art.

At present, the legislation shows a real gap on these specific assets.

In the absence of specific regulatory guidance, therefore, given that by default NFTs seem to be treated in the same way as cryptocurrencies or other crypto-assets, it is necessary to assess on a case-by-case basis and reconstruct a connection between the various regulations that are abstractly applicable.

11. What happens if I don’t declare and pay taxes?

At this point, the regulatory framework leaves no room for doubt: while prior to the entry into force, one could invoke reasons of objective uncertainty on the application of tax rules, and if necessary appeal to a legitimate expectation that could have come to the rescue at least on the front of the application of penalties and interest, today this possibility is excluded by the clear tenor of the recently adopted legislation.

This entails an unconditional obligation to declare income generated by crypto-asset transactions, bearing in mind that, when discussing large amounts, the risk is to incur penalties not only of a pecuniary and administrative nature, but also of a criminal nature.

In case that, due to the non-declaration of income (also as a result of possible non-declaration of capital gains), there is an evasion of more than €100,000 of a single tax and, at the same time, the total amount of assets evaded from taxation, including through the indication of non-existent passive elements, exceeds 10% of the total amount of assets indicated in the declaration, or, in any case exceeds the total threshold of two million, in these cases, the penalty stipulated is that of imprisonment from two years to four years and six months.

12. Is it possible to remunerate an employee in cryptocurrency? How does it work?

Paying an employee in cryptocurrencies is possible if the employee decides to accept them in payment. In this case, the paycheck is expressed in the currency having legal tender (thus in €) and the employee will be transferred the countervalue in cryptocurrency.

Tax deductions, of course, will be calculated on the € amount.

From the time of receipt, tax obligations related to holding and any capital gains will fall on the employee.

Thus, if he or she does not cash out, the employee will only be required to enter the holding of cryptocurrencies in the RW form of his or her tax return and to pay stamp duty for the years in which he or she maintains the holding.

If he/she then accrues taxable capital gains (i.e., in excess of €2,000), he/she will be responsible for declaring them and paying the relevant taxes.


The impending future of crypto


The cases of Silicon Valley Bank and Credit Suisse have set off a wake-up call and sounded the alarm on the banking system not only overseas, but also on the old continent, and there is already talk in the circles of traders and in major industry publications of a widespread crisis in the banking sector.

By contrast, in the crypto finance sector, the markets have held up remarkably well to the impact of the collapse of some major exchange platforms (from FTX to Italy’s The Rock Trading), and the prices of major assets such as Bitcoin, continue their upward race.

What’s more, a framework of increasingly clear rules is gradually emerging: from the first package of rules on the tax treatment of income from crypto-assets, to the now imminent adoption of MiCA (Markets in Crypto-Assets), the European regulation of the cryptocurrency sector from which important protections for savers are expected.

Furthermore, these days saw the approval of a decree-law on tokenization, that is, on the issuance and circulation of stocks, bonds, debt securities and other financial instruments through distributed ledger technologies.

Is this the first step toward building a large-scale market for alternative, competitive, and commonly accessed cryptographic services to conventional banking and finance for individuals and businesses?

What kind of future can we expect to see for cryptocurrencies?

We talked about it with Gianluca Massini Rosati, founder and chairman of Allcore S.p.A. Group, listed on the Italian stock exchange, a leading player in the business and tax consulting sector, which has experienced tremendous growth in recent years.

Massini Rosati has believed from the very beginning in the potential of decentralized assets and technologies.

It has done so to the point of investing in the creation of a blockchain-based corporate treasury services platform and, more recently, a brand new division, Crypt&Co, which specializes in crypto-related tax and legal support and consulting for non-professionals and others: one of the main missions is to accompany companies in a transition in which the use of crypto assets will become a crucial tool for strategic, financial and tax planning.

Q: In light of the regulations introduced with Finance Act 2023, what are the main changes regarding cryptocurrency tax obligations?

A: With Law 197, effective 1 January 2023, the impetus was finally given to fill those long overdue legislative gaps in the area of crypto taxation. First of all, cryptocurrencies were given a classification as virtual assets, the obligation to declare assets held was established, and the “events” that give rise to taxation instead were defined.

Q: Declaratory obligation and taxation: let’s clarify these two aspects.

A: On the declaratory aspect, all holders of cryptocurrencies or digital assets are now required to fill in the 2023 income form, specifically, the so-called RW form, that is, the document dedicated to the monitoring of foreign wealth investments and financial assets.

On the other hand, as far as the tax framework and the RT form are concerned, certain transactions of buying and selling or transferring cryptocurrencies, defined as crypto-assets by the legislation, may result in a tax to be paid. The same regulation also says that the exchange between crypto-assets having the same characteristics and functions is not considered a taxable transaction, and therefore is not subject to tax.

Q: Are there any aspects of particular importance in this new regulatory and tax framework for crypto holders?

A: The calculation of taxable capital gains is based on the difference between the consideration received and the cost or purchase value. Capital losses, on the other hand, can be taken as a full deduction for amounts over €2,000.

There is to be considered that the cost or purchase value must be documented with certain and precise elements by the taxpayer. In the absence of these, the cost is zero.


In case of purchases by inheritance, the purchase cost is equal to that declared for inheritance tax purposes. In contrast, on crypto donation, the purchase cost of the donor is assumed.

Finally, any transfer to parties other than the intestate owners of the source report, unless the transfer was by inheritance or gift, is considered cashout.

Q: Coming back to the obligations on the part of a user who has been holding cryptocurrencies for some time, but in previous years has never declared his cryptocurrencies or digital assets, what should he do to regularize his position with the tax authorities?

A: To regularize their position, users who have not reported crypto-assets as of 31 December 2021 in their tax returns can, in the case of no income to declare, meaning without ever having made any cash out, pay a penalty for failure to declare in the reduced amount of 0.5% for each year of holding on the value of the undeclared assets.

On the other hand, in case of income to be declared, i.e., as a result of cash out, regularization can be done by paying a substitute tax of 3.5% of the value at the time of realization and a penalty for failure to declare in the reduced amount of 0.5% for each year.

There is an opportunity to be highlighted in this regard: there is a revaluation of the value of crypto-assets held as of 1 January 2023 by assuming the value as of that date through the payment of a substitute income tax of 14%, payable in 3 annual installments, with the first installment to be paid by 30 June 2023.

However, this opportunity is to be evaluated according to convenience with respect to the revaluation itself and based on previous activities. In this case specific advice on the individual case is necessary: advice that at Crypt&Co. [cryptandco.com] we provide to our clients.

Q: Recently, the Decree-Law No. 25/2023 on the adaptation of national legislation to European standards on the “tokenization” of financial assets was enacted. Is this a step toward a change that will increasingly lead to decentralized finance? On the fiscal side, what might this entail for investors? 

A: The ability to turn financial instruments into tokens will allow peer-to-peer trading of instruments such as stocks, bonds and debt securities, taking advantage of blockchain technology and all the decentralization aspects it entails.

One of the most interesting aspects will be the disintermediation of this sector, which, at least in theory, will change hands from financial institutions to technology platforms, effectively changing forever the face of the financial system we have always known. It could lead to a system that self-regulates and cleans itself of the excesses we have been experiencing for the past 20 years, moving us from the debt economy to the value economy.

Certainly for both individuals and companies, it will be interesting to be able to evaluate different investment aspects that rely on new technologies. In this case, sound tax planning will be a game-changer of a proper investment project, and availing of experts in this innovative field would benefit individuals who, while intending to approach disintermediated finance, will be able to remain secure in their relationship with the IRS.


Tax management of crypto-assets: tools and strategies


In light of the new provisions introduced with the recent Finance Act, it becomes of paramount importance on the one hand to plan for cash out, and on the other hand to be able to analytically reconstruct (as far as possible) the past movements and historical value of one’s cryptocurrencies: both to keep an eye on the tax burdens that may result, and to be able to effectively protect oneself in case of audits by the tax authorities.

Tax and the possession of crypto

When the movements or the size of cryptocurrency wallets to be reported are small, this can be handled simply and “empirically.” But when the movements are numerous and perhaps close together (as is the case with particularly experienced and dedicated users of intensive trading practices), or when one has been trading on numerous different crypto platforms, having the technological support of an application becomes essential to facilitate all the work of monitoring and reporting on the movements and countervalues of one’s digital assets.

There are few applications that allow this kind of monitoring and reporting on the market. There is one that has the unique feature of being designed to connect with Italian tax regulations: it is Cryptobooks.

The application allows users to connect the wallets and exchange accounts they use in a single solution to keep track of all cryptocurrencies held and facilitate compliance with Italian crypto tax laws and regulations.

It also allows users to automatically create all tax reports on their crypto-assets, such as one on capital gains, stocks, commissions and others, to be able to deal with any tax assessment without worries.

To find out more, we interviewed the CEO of the company that developed and markets it: Federico Pacilli.

  1. Q. With the regulations approved within Finance Law 2023, compared to the previous total absence of positive tax law regulations, we now have a regulatory framework that, if nothing else, establishes a set of principles regarding taxes.

With respect to this new regulatory framework, how does CryptoBooks help the cryptocurrency holder to be more “compliant” with the new tax provisions?

  1. CryptoBooks has already incorporated the developments in cryptocurrency taxation introduced by the latest regulations in order to be able to provide its users with reports that are more compliant with Italian law. In addition, as soon as the final measure of the Italian “Agenzia delle Entrate” (tax authority) comes out, which will clarify the latest operational aspects, we will release new reports that will further help taxpayers to consciously orient themselves on the regularization of past returns and also on the convenience of revaluing their cryptocurrencies.
  2. Q. Operationally, how should cryptocurrencies be declared in the next tax return? And how can Cryptobooks facilitate the filing of returns?
  3. From 2023 onward, the declaration of the RW and RT framework of the income tax form will be mandatory, and with CryptoBooks we are already able to create compliant reports for filling out these forms. It is useful to point out that the reports provided contain all the information to determine the best declaration strategy, together with your accountant, and enter the correct figures in the frameworks of your return.

Q: Cryptocurrency traders often find themselves operating on multiple platforms. If you have numerous transactions, how do you report them correctly to know exactly what the taxable income is? How can Cryptobooks facilitate this type of reporting?

  1. What is asked of our client is to link their crypto platforms and indicate the public addresses of their wallets so that all cryptocurrency transactions are automatically downloaded by our software; at that point, CryptoBooks provides all the tax reports necessary for proper reporting. Cryptocurrency tax reporting is very complex, think of the multiplicity of cryptocurrency transactions such as: staking, lending, borrowing, trading or simple NFT ownership, it is necessary to apply accounting principles to each of these types of transactions. Our peculiarity is that we have made this complissity affordable for everyone. 

Q: If a user has been holding cryptocurrencies but has never previously declared their crypto assets, what do they risk? And how can he or she become compliant?

  1. Failure to declare carries penalties that can reach, in the most serious cases, 30% of what has not been declared: a real bloodbath. Fortunately, the current “Amnesty” (so improperly called) allows one to regularize one’s crypto under decidedly favorable conditions. With CryptoBooks, we help cryptocurrency holders make the calculations and adjust the past years. 
  2. Q. In conclusion, how can CryptoBooks help the crypto investor adopt the best declaratory solution?
  3. CryptoBooks’ reports, which are the most reliable that any software can process, offer all the essential information necessary to be able to establish an effective declarative strategy that is based on correct calculations-essential elements for paying only the taxes owed and not a euro more. Our solution provides a number of functions that are unique in the industry and essential to have square calculations accounted for: we automatically track mismatches between balances and transactions on exchanges, we monitor cryptocurrencies that do not have load prices and highlight them to the client, we track transfers between different user sources in order not to miscalculate capital gains.

CryptoBooks provides 4 different subscription plans to meet every need.

Now, since actions are worth a thousand words, we thought we would offer Cryptonomist readers the opportunity to purchase Cryptobooks with a 25% discount on the purchase of the chosen plan.

For this, we have activated a promo code dedicated to those who read The Cryptonomist: just create a CryptoBooks account and then, during the purchase, enter the code CB-CRYPTONOMIST-25 within the required field.

To sum it up, Cryptobooks presents itself to the market as a tool that can make life much easier also from the point of view of tax compliance and also of possible prospects for audits and litigation, in a system, as is the Italian regulatory and tax system, that too often, amidst regulatory loopholes and shortcomings, results in a kind of minefield for users and operators.

The final word of course remains with the market and end users, but the product has extremely interesting features.


Crypto and AI: the future of the lawyer’s role (part 2)


One of these is that human beings might find a different role and position than we are used to today.

So if, for argument’s sake, a machine were to be made that could give an ineluctably exact answer to the legal question and thus provide a virtually ineluctable response as to the possible outcome of a dispute, theoretically the role of the lawyer might move into an area other than that of working out the answer to the question. Perhaps, that of knowing how to pose the right question to the machine that will then provide the answer. Thus, he would be concerned that the machine be given all the most appropriate elements and parameters to generate the expected answer.

Or he might move into that area of “training” the legal machine, and then provide or see to it that all the legal data and information needed to make its evaluations are provided to the machine.

And since this machine, following this hypothesis, will be able to provide with ineluctable exactitude to render a verdict that we assume is “fair,” the role of the judge perhaps could become that of making sure that the parties do not cheat in providing the machine with the necessary elements to render the verdict and that the criteria of judgment entered and applied by the machine meet fairness, reasonableness, proportionality, non-discrimination, etc.

All of this, by the way, seems to be in line with the famous five principles set by CEPEJ – European Commission for the Efficiency of Justice (i.e., the Council of Europe’s Commission for the Efficiency of Justice, that body of the CoE representing the 47 countries whose purpose is to test and monitor the efficiency and functioning of European justice systems) in the Ethics Charter on the Use of Artificial Intelligence in Justice Systems: (i) Principle of respect for fundamental rights; (ii) Principle of non-discrimination (iii) Principle of quality and safety; (iv) Principle of transparency, impartiality and fairness (v) Principle of user control.

Now, even accepting the idea that a future in which AI finds massive use in the legal field the role of humans may shift to the area of supervision only, there are other considerations to be made as well. Mainly because when we imagine a justice system administered with these seemingly neutral and infallible tools, we represent to ourselves an apparatus that merely enforces laws and rules. A mere executor of precepts.

This representation of justice, however, does not exist in practical reality, because, in defiance of any petition of principle and the principle of separation of powers, those who render a verdict often do in fact, to some extent, contribute to the production of law and alter its fabric. That is, the judicial function often concurs specifically in the creation and consolidation of rules.

Of course, this extent varies across legislative and constitutional systems. It is certainly greater in common law countries, where law is formed through precedent-setting decisions.

However, this is also true in countries with codified law, such as Italy, France, Germany, etc. In these systems, in fact, the interpretation given through judicial decision sometimes forces or even bends formal law, complements it when it finds gaps and deficiencies in it, disregards it and places it in the void when conditions exist that place it at odds with higher-ranking principles.

That is, the judicial function, whether directly or indirectly, often ends up encroaching on the field of the regulatory function, and this can happen at different levels.

Note: this is not to rule out the possibility that, in the abstract, a machine called upon to produce regulations is not capable of doing so even better than man. If only for the fact that history is full of bad human regulators. To take an extreme example, consider the horrific experience of the Holocaust and ethnic cleansing: these were horrors that were legally supported by legislative systems based on macroscopically inhumane principles, yet they were created and imposed by human beings themselves.

The encounter between normative production and artificial intelligence

The crucial point is another: are we really sure we want to give machines access to the process of normative production? And to what extent? And we must keep in mind that this entry can also take place in a “creeping” way, through that half-open doorway of the jurisdictional function.

The idea that the functions that can be exercised by machines can remain relegated to a merely executive, or at most auxiliary, role with respect to the work and volition of man, by virtue of those ethical and formal bars imposed by man (e.g., the laws of robotics, Asimov’s or, indeed, the principles elaborated in the European context on the use of AI in judicial systems) can be appeasing.

These are in this case rules dictated directly from Man to Machine and respond in a broad sense to the satisfaction of Man’s own existential vocation. That is, they are all in some way conservative and functional to the development and preservation of the existence of humankind.

And it is here that the somewhat philosophical dilemma is triggered, if you will: if we were ever to allow a non-human entity to enter fully into the process of normative formation, given that it, precisely as an entity is immanently endowed with its own existential vocation, what would prevent it from writing rules that do not respond to man’s existential vocation?

To take an extreme example, if we were to pose the problem of overpopulation and the scarcity of food and energy resources, globally, as humans, subject to certain pathological ideological drifts, on the ethical level we would repudiate as a means of solving the problem solutions that postulate mass extermination or the murder of human beings.

The same problem, seen through the eyes of a non-human entity, which might not recognize identical ethical principles, could lead to the solution of mass extermination, perhaps on the basis of selective criteria aimed at eliminating the weakest subjects (the very ones that human ethics dictates should be preserved as a priority) as the most reasonable solution on a strictly and coldly logical level.

Massimo Chiriatti, among the leading experts on artificial intelligence in Italy, who in many of his writings has clarified his views on the limits of artificial intelligence and the supervisory role that humans must maintain in an ironclad manner in the use of these technologies in his “Artificial Unconsciousness” states:

“There is a very important point to consider: every AI prediction is a quantitative assessment, never a qualitative one, whereas for us humans a choice is almost never a simple calculation. We make decisions based on immeasurable and therefore incomputable values. We are the teachers of the machines. We are implicitly so when they assimilate the data we create, when they build the model and give us the answers. 

We are explicitly so when we give them instructions on how to do a job. For these reasons we must pay attention to how they learn, because in doing so they will evolve.”

Beyond the extreme example just given, while it is vain and illusory to oppose the development of technology, this kind of process must be governed with the utmost awareness.

Today we are discussing the impact of artificial intelligence on the legal professions, with respect to which situations and values of extreme delicacy and peculiarities related to intellectual sophistication, creativity and all those components that we like to trace back to the intangible essence of man.

The same issue, however, is bound to generate a large-scale impact on the hundreds of jobs that machines in a very short time will be able to perform as well as and better than humans, at infinitely lower cost.

Should we feel threatened by crypto and artificial intelligence (AI)?

The massive proportions of the issue should lead us to reflect on fallout that will impact the real world and our ability to read reality, as the social and political view of the world of work and the economy will be revolutionized.

If it is legitimate to ask a number of questions, with respect to the world of the legal professions, it is necessary to consider that similar questions will have to be asked about much of the world of work.

For us, the most immediate ones are, “What will happen to the humans, judges and lawyers, who today perform that role and functions that tomorrow might be performed by machines? How will they earn a living?”

But on the level of collective interest, there are far more: “Who will pay the social security contributions and who will provide the community with the tax revenue generated by the incomes of all the human workers replaced by machines?” And again, “what will happen to all those figures who contribute to the performance of the activities of these operators (assistants, collaborators, practitioners, etc.) and what will happen when their contribution and tax revenues are also lost?”

Well, these questions also arise for all the other job categories that may be hit by the robotic and digital revolution in an even smaller time frame than the one that is likely to affect legal workers.

Scenarios arise that could render the sociological, economic, anthropological, and political views known today outdated: socialism, liberalism, libertarianism, sovereignism, and so on, would lose their conceptual foundations.

Much, if not everything, would have to be rethought from scratch.

But returning to the topic of AI in the legal field, my personal view is that the role of the lawyer (by vocation an interpreter not only of norms, but also of facts and, to some extent, of humans), will not be able to be limited to migrating to a different region of the legal services production cycle.

My idea is that the lawyer, and legal practitioners more generally, could be given a higher role: that is, to see to it that awareness in the governance of technological development is always proportionate to the real welfare purposes of mankind, properly channeled and, if necessary, also consciously and reasonably curbed.

There is a famous Chinese saying, “when the wind of change blows, some put up barriers, others build windmills.”

Now, although I like to think I can count myself among those who “when the wind of change blows” enthusiastically throw themselves into building windmills, I would not want to get to a point where windmills no longer need humans to exist, since their existence is devoted to the need for other windmills.

And if it came to that, would man need such windmills?

Now, the lawyer by definition is one who is called (ad vocatum) to defend and plead a cause. Here is his cause: he will have to see to it that humans keep a firm grip on the rules and that machines remain anchored in the role for which they were created: to work in the service of humanity.

And when necessary he will have to stand up and fight, so that this is how it is and how it will remain.

To fight for the good of humanity. Like Mazinga Zeta, in the famous Japanese cartoon, for those who remember it.

Sounds good, but Mazinga Zeta, wasn’t he also a robot?


Cryptocurrencies and taxation in 2023


As everyone knows by now, the Finance Act passed at the end of December 2022, introduced several new tax provisions for those who earn income from what is called crypto assets.

Net of all discussions about the shortcomings of the approved law, it offers some opportunities that, depending on the case, can be extremely advantageous to take advantage of.

Let us try to examine them concretely.

Careful management of cash flows: cryptocurrencies and taxation 

If until yesterday there was room to question the very basic assumptions of taxation of income from cryptocurrency trading activities, today this possibility is no longer there.

The law clearly states that capital gains from cryptocurrency trading are subject to a 26 percent substitute tax (for cashouts made on or after January 1, 2022).

The prerequisite under which the tax is triggered is that these capital gains exceed the amount of 2,000 euros in the tax year.

Of course, it is necessary to be clear under what conditions a taxable capital gain is considered to have accrued.

For this condition to occur, it is necessary that, during the year, there is not only an increase in the value of the cryptocurrencies held (and thus a differential between the purchase value and the value reached during the year) but also that the cryptocurrencies held in a wallet are converted into fiat currencies or when acts of disposition are carried out that, according to the legislator, in essence, “land down” the value of virtual currencies in the real world. And that is what is referred to as “dispositions for consideration” and includes a wide range of transactions.

It is important to know that exchange transactions between cryptocurrencies with the same functions and characteristics, according to the law, are tax neutral. Thus, they are not among the transactions for consideration that trigger the tax liability.

Beyond the issue (for which clarification from the Italian tax agency Agenzia delle Entrate would be needed) when, in the case of an exchange, one can talk about crypto assets that do or do not have the same functions and characteristics, the central issue is that since these are the rules, there are many options to keep under control the possible tax burden that may arise from the activities of buying, holding, converting and moving cryptocurrencies or crypto assets.

To this end, documenting and keeping track of transactions, monitoring the counter values of cryptocurrencies held, and planning for cashout transactions or those that integrate “sale for consideration” under the law, is of paramount importance to “dose” the amount of any taxable capital gains.

How? First and foremost, it can be useful to use specific applications created specifically to document and monitor crypto values and movements. Such applications, by the way, offer great practical help when it comes time to file a tax return.

Equally important is to be supported by professionals, accountants, and accounting experts, with specific expertise in cryptocurrencies, who know how to manage this particular type of asset. This is a perceived need, to the point that the business and tax consulting firm AllCore S.p.A. has created a special division called Crypt&Co. [cryptandco.com], in which a pool of professionals in the crypto tax, legal and accounting fields is made available to clients to offer targeted services of this kind, related to the management and legal and tax implications of crypto assets.

The opportunity for “amnesty”

Perhaps the expression “amnesty” is not the most technically appropriate one, but within the package of regulations included in the Finance Act there are specific measures to induce the emergence of cryptocurrency holdings and regularize the tax position of taxpayers who, in the past, that is, in the period preceding the approval of the regulations, failed to declare their possession.

Paragraphs 139 and 140 of Article 1 of the Budget Law, therefore, provide for the possibility of filing an emersion petition for crypto assets held until 12/31/2022, through the submission of a special declaration.

The purpose pursued by the rule is to rectify the error or forgetfulness, for not having made in due time the declaration of holding or any income within, respectively, the RW and RT forms of tax returns and implies the need to provide for the payment of sums, the amount of which varies depending on whether or not income was earned during that period.

So, if no income has been earned, an amount equal to 0.5 percent must be paid for each year, concerning the total value of the cryptocurrencies not declared in the RW return (para. 139).

If, on the other hand, income has been earned, then, to rectify the failure to comply with the declaration obligation, an amount equal to 3.5 percent of the value of the crypto-assets held at the end of each year or at the time of realization will have to be paid. In addition, they will have to pay an additional amount, equal to 0.5 percent of the same value for each year of holding, by way of penalties and interest, for failure to declare in the RW panel.

Finally, Paragraph 133 of the Budget Law provides for the possibility of revaluating crypto-assets held as of January 1, 2023, subjecting it to a substitute tax in the amount of 14 percent, which can be paid in three years, the first of which by June 30, 2023.

An option that becomes convenient if the carrying values of the cryptocurrencies held for the past are significantly lower than the current value or, in those cases where the carrying values cannot be traced, and in these cases, even if the law does not expressly provide for it (and well would have done the legislature to include and regulate this possibility) the use of an expert opinion on the value of the assets held could be of great use also in the perspective of possible future disputes by the tax authorities.

In conclusion, after a period of total confusion, the law today offers an opportunity to regularize one’s position on cryptocurrencies for the past as well. And it is an opportunity that, although it entails costs, should be carefully considered, and if possible, seized.

It is also a time to leave improvisations behind and manage your crypto assets wisely, planning choices and operations for the future.

It is an interesting time and harbinger of opportunities for businesses as well, because the regulatory framework with these greater certainties may allow the use of crypto-assets, now typified and regulated by law, for capitalization operations.

All of this, however, cannot be left to chance and, above all, cannot ignore the need to be supported by professionals, lawyers, and accountants, equipped with specific skills.

Everyone crazy about crypto and artificial intelligence (AI)? Lawyers not so much (part 1)


There has been a lot of talk lately about the amazing performance of the most popular AI applications. Among the superstars, of course, ChatGPT, the application developed by OpenAI, holds sway on all social media: raise your hand if you tried to play around with it.

By now, these applications can be asked anything and they give jaw-dropping answers. Meanwhile, Google is preparing to launch its offensive on this front with Bard, its application that promises to be better than ChatGPT.

Indeed, for the non-techie, the reactions of the most advanced artificial intelligence applications can leave one stunned. Indeed, it is so not only for non-techies: last year, there was the case of Blake Lemoine, a Google engineer who had claimed that the LaMDA artificial intelligence (AI) system designed to converse with humans (which is then the basis of Bard) was sentient and was fired for it, causing a stir.

Now, one of the areas where the use of artificial intelligence is most controversial is in the legal field.

Over time, many doubts have been raised about the actual degree of effectiveness of these technologies, whether or not they should be used, and, not least, about a number of ethical implications that may arise from the use of artificial intelligence applications when handling the sphere of people’s rights, especially when considering the possible impact on property rights and even personal freedoms.

On a practical level, however, artificial intelligence programs, technologies and applications have been used in the legal field for several years now.

We certainly cannot speak of massive, let alone widespread, adoption, but these applications are also becoming more and more established and widespread in the world of law.

It has been at least since the second decade of the 2000s that several law firms around the world, including Italian ones, have been using systems such as Ross, developed by IBM, or Luminance. These are systems created to quickly analyze and parse, sort, group, and classify large quantities of documents, to detect anomalies in them by reporting them to professionals. These systems are mostly used to support the performance of due diligence on large transactions to speed up and facilitate the work of professionals.

In the same years, however, different uses of artificial intelligence in the legal field have also been experimented with: in 2017, the British start-up, CaseCrunch, launched a challenge in which it pitted its CaseCruncher software against a lineup of 100 highly experienced live lawyers to solve a sample of legal cases in banking. The artificial intelligence system got the better of the humans, beating them in speed, in quality (providing tighter-fitting solutions) and at shamefully lower cost (£300/hour for the humans versus £17/hour for the machines).

All of which, you will agree, is quite disturbing to anyone wearing a robe.

Crypto, artificial intelligence (AI) and the legal system

And while this may already seem disturbing, i.e., the possibility that a machine could play an “active” role in the decision-making processes underlying possible defensive strategies in the legal sphere, performing even better than a flesh-and-blood lawyer, it becomes even more delicate if this technology begins to enter the processing processes underlying possible judicial verdicts or the adoption of administrative measures capable of positively or negatively affecting the legal sphere of individuals.

If you are wondering, the answer is yes: this has also been happening for several years already. Predictive justice systems have been experimented with for many years. One of the cases that has caused quite a bit of discussion is the Compas (Correctional Offender Management Profiling for Alternative Sanctions) application, an algorithm that has been used for many years in some US courts to predict a defendant’s likelihood of recidivism in order to quantify the amount of bail.

The point is that this system has often proven to be unreliable and even discriminatory, because it tends to overestimate the risk of recidivism for African American defendants and underestimate it for Caucasian, white defendants. In addition, because the operation of this application is covered by patent-protected secrecy, the system is far from transparent because its judging criteria cannot be accessed. Nevertheless, it continues to be used and its use has been ruled legitimate by the Wisconsin Supreme Court.

University College of London several years ago conducted an interesting experiment: software simulated the judgment of the European Court of Human Rights on a sample of 584 real, already adjudicated cases (cases on torture, degrading treatment, and invasion of privacy). The result was that for 79% of them the machine verdict coincided with the decision of the Strasbourg Court. Good but not great.

In Estonia, judges-robots have been experimented with to resolve smaller disputes (up to 7 thousand euros in value) to clear the backlog. In addition, already tens of millions of disputes between eBay traders are handled and resolved with automated “online dispute resolution” systems, without the use of human lawyers and judges.

And again, Prometea, an AI system that manages and resolves repetitive and simple-structured court cases in a time space of a few seconds, has been developed in Argentina. The numbers generated are impressive: this system has been able to churn out thousands of judgments in just a few days, where traditional methods used to take as many as ten or twenty times as many, depending on the various subjects of application.

The same system has also been adopted by the Inter-American Court of Human Rights, which has achieved an increase in efficiency of up to 143%, and its use has also been evaluated by the French Council of State.

Time flies in the world of technology. Here we are talking about experiments carried out seven to eight years ago. Yet, it already seems like prehistory. To go to something closer to the present day, the use of AI in the judicial field is back in the news today with the news that in February, for the first time in the US, a case would be argued by a lawyer-robot, thanks to the DoNotPay application.

The DoNotPay case

DoNotPay is an artificial intelligence application created a few years ago to prepare and forward in an automated way a range of elementary legal acts, mostly out-of-court, such as cancellation letters to services, objections to fines, warnings etc.

Now, the creators of the application, which has since been further developed and evolved considerably, have thrown down the gauntlet: in a minor dispute (over a traffic infraction) an artificial intelligence system would dictate (literally) the defendant’s defense. In practice, a live lawyer would repeat in the courtroom, verbatim, every word dictated to him, through earphones, by the artificial intelligence system.

Nothing more was made of the matter afterwards because, apparently, the US Attorney General’s Office was going to push for it.

The fact remains that the news made its impact.

As one can easily imagine, the category of live jurists, be they lawyers or judges, is densely populated with exponents who are not particularly happy at the prospect that computers and software can steal their jobs and, what is more, do it better and cheaper.

It was precisely in recent days that I happened to come across a promotional Facebook post by a leading legal publisher and producer of databases and software for professional firms, announcing a training activity on lawyer 4.0, on topics such as the metaverse and artificial intelligence applications.

This was followed by an impressive amount of comments, negative in almost all, posted by a great many lawyers. The tones of the comments, often sarcastic, expressed a deep rejection and even outright disdain for the use of technology. The underlying sense: they want to eliminate the human element from justice. They are distorting our profession. Where are we going to end up at this rate?

Of course, lawyers are a particularly conservative profession now, especially in Italy, and this is common knowledge. However, distrust and hostility toward artificial intelligence are quite widespread sentiments in many areas, whatever the underlying reasons.

The fact remains that, like it or not, today we have to come to terms with this scenario: that the whole path that begins with the assessment of the prospects of a possible dispute, passes through the onset of a dispute and culminates with the issuance of a judicial decision, in the future may be entrusted to non-human systems, if not in full, at least for a large part.

And to the question “what about the lawyer?” as well as “what about the judge?” many possible answers can be given.

The Rock Trading: crypto bankruptcy in Italian style


The Rock Trading

The Rock Trading, a historic exchange in Italy, has suspended its operations: at present, users cannot trade or withdraw their funds.

Officially, the website page refers to “difficulties encountered in liquidity management.” Which can mean anything: did you run out of money? Did you forget the combination to the safe where you keep it? Do you have so much that you don’t really know what to do with it?

There had been some warning signs when users for several weeks experienced increasing difficulties and delays in withdrawing their funds. Then, suddenly, the terse announcement on the website’s homepage.

Very little is known about the details of this crisis: the information found on the web does not go beyond the obvious fact of the closure of the platform’s operations, and, on the other hand, the company’s management has let little or nothing leak out. Users and investors remained in the dark until the last moment.

At present, it is impossible to understand what events and causes, corporate or governance, led to the sudden closure of one of the longest-running and (apparently) most reliable exchange platforms in Italy and Europe.

But this is not the place for investigations or speculation about the company’s financial management: that kind of analysis will be taken care of by specialized analysts. Certainly the problem is not related to the nature or characteristics of the crypto assets that the platform traded.

However, this is where we reason about issues of legal and legislative relevance.

The Rock Trading affair gives rise to considerable legal reflections on crucial issues. Some of them we have already made, on the occasion of the FTX case and other major platforms that ended up in insolvency situations.

Even though we do not yet know the background of the affair that affected the Italian platform (and with it, thousands of blameless users), there is a common thread that inevitably unites all these cases of unexpected bankruptcies.

Why did The Rock Trading go bankrupt?

The first consideration is that these crashes, quite obviously, have nothing to do with the volatility of crypto assets, nor with the decentralized nature of traded assets.

This is because volatility is irrelevant where an exchange derives its income from fees on exchanges. It does not matter whether the price of a certain asset goes up or down.

The second consideration is that the decentralized nature of the object of exchange transactions is also completely irrelevant, because in reality an exchange platform is a centralized entity, i.e., an intermediary.

Going by exclusion, the problem must be sought on aspects of corporate and financial management of resources and in the governance of the company.

To use a metaphor, if the ship went straight over a reef, it matters little whether it crashed there because there was an honest mistake in the course calculation or because the entire crew was dancing drunk on the deck without paying attention to the rudder.

The point is that the vessel was steered in the wrong direction; it is not as if it gave out its hull because of a design error or because the materials used in its construction were of poor quality.

Now, stepping out of the metaphor, the crux of the matter lies in the fact that in the quagmire of laws and regulations there are almost no measures taken to date to protect users and savers who relate to and rely on centralized exchanges, such as might be, among the many, Binance or Coinbase, but also like those swept up in storms and bankruptcies, such as FTX and, of course, most recently, The Rock Trading.

No one has ever imposed on these types of intermediaries any particular requirement of professional reliability or in terms of capital guarantees to enter the market, and even more so to be able to target a market of non-professional investors. Nor were specific conduct obligations or forms of supervision and control imposed on the proper use of funds entrusted by savers, and so on.

And all this in spite of all those bigwigs at central banks and supervisory and regulatory bodies who publicly in recent times have been tearing their hair out with regard to the volatility of cryptocurrencies, their lack of underlying value and their supposed anonymity, since those very top figures could have done so much more to ensure that concrete and effective safeguards and protection measures were taken in favor of users.

In a nutshell, a lot of press releases, a lot of talk, but very little action.

What about regulation to protect savers?

Now, if we take a case like that of The Rock Trading, there is indeed food for thought: first of all, we are talking about a platform that was duly registered in the dedicated register established at the OAM, in application of the provisions of the AML law and the implementing legislation adopted by the MEF in early 2022.

This demonstrates that, net of all the hype, admission to the register guarantees absolutely nothing, whether on the quality front or on the reliability of the operators. Being listed on it protects nothing and no one. It only triggers the obligation to report to the tax authorities the names and surnames of those who engage in cryptocurrency trading.

It also gives one pause for thought that, throughout the process of adopting the legislation implementing the requirements that later led to the implementation of the OAM registry, it was precisely The Rock Trading that was one of the most active operators in the interlocutions with bodies and institutions called upon to prepare the draft measures.

Another thing known to those who work in the environment, is that the company would put important resources in the field, appointing professionals of clear reputation for the specific purpose of initiating and actively managing institutional relations at the parliamentary and majority level, to prepare drafts of regulatory texts and arrive at the approval of a law on the tax treatment of cryptocurrencies.

Thus, we are talking about a historic platform, which has been operating at a high level, side by side with legislators, supervisors and regulators, and the like on the institutional level.

Yet, this epitome of solidity and reliability (at this point, only apparent), overnight simply closed its doors and blocked user assets, without providing any explanation other than a generic reference to liquidity problems.

It was a rude awakening for those who might have had it in their minds that the world of centralized exchange and trading platforms had embarked on a path to look increasingly like the world of conventional banking and financial brokerage services.

And those who might have had this kind of vision, unless they had in mind something akin to the pilgrimage route to Santiago de Compostela, had better digest the idea that it will still be a long road ahead.

The necessity of the MiCA

And to be fair, this journey will probably only really begin when MiCA, the European regulation on cryptographic assets, is finally approved. And it may be true that this regulation will have already been created outdated and full of loopholes (first and foremost on DeFi and NFTs), but it is the first major piece of legislation imposing on cryptographic asset service providers (CASPs) requirements necessary to operate in the European market and significant conduct obligations.

Whether all of this will be enough to avoid nightmares like FTX or The Rock Trading remains to be seen: after all, we have seen far too many traditional banks gone belly up, despite all the elaborate system of regulations, controls and supervision.

Nonetheless, at least it’s a start.

Besides, it makes sense for operators offering services on crypto assets to be aware of the fact that if you really want to be essentially a bank, then it is also only fair that you should accept its rules and limitations.