On 13 November 2018, European Commission Vice-President Valdis Dombrovskis issued a statement at the European Parliament Plenary on regulating virtual currencies and Initial Coin Offerings (ICOs). In the statement, Mr Dombrovskis posts two questions for financial regulators to consider:

  1. Whether crypto-assets are financial instruments, and are therefore covered by financial regulation?
  2. Whether that regulation is suitable and addresses the risks, while supporting and enabling the opportunities?

Mr Dombrovskis suggests that there is no simple answer to these questions, instead whether the current EU financial regulatory framework applies to crypto-assets on the one hand depends on the specific characteristics of each crypto-asset. It is further noted that financial regulation and definitions of financial instruments were developed before the age of crypto-assets and ICOs – consequently it is often not clear whether they are covered or not, even if they present similar features to financial instruments. This question is being assessed alongside the European Supervisory Authorities, the conclusions of this assessment will be published by the end of the year.