Regulation of crypto-assets in Serbia has just begun

The Securities Commission (“Commission”) sent a call, on March 5th 2019 to all interested parties for participation in public consultations on the regulation of crypto-assets in Serbia. The public consultation process will last until May 15, 2019.

Given that this area is not regulated in Serbia, public consultations are starting so that it can begin with the regulation development and Serbia can keep up with the regulation of European Union and other countries in the world in this area. The beginning of the public consultation process primarily consists of several questions that the Commission has communicated to the public in order to instruct them to the direction of the regulatory process itself. In addition, in the Consultation Paper sent to the public the Commission presented its outlook on the regulation, i.e. the Commission suggested the prospect of the foundation of the regulation. In the Consultation Paper special regard was made about the types of crypto-assets keeping in mind classification established by the law of the European Union.

One of the Commission’s main objectives is to create legal security by regulating this area so that the IT sector that has great potential for development in Serbia will continue to advance properly, taking into account that a significant number of IT experts in Serbia are participating in the development of Distributed Ledger Technology (“DLT”). In addition, the fact that crypto-assets can, by their nature, provide anonymity is another reason to expedite the regulation process in this area.

In the Consultative Paper the Commission briefly outlined its position on the crypto-assets that qualify as financial instruments, particularly with regard to its regulatory framework by the Law on the Capital Market. The Commission also attached a draft version of criteria to determine whether certain crypto-asset belong to particular category of financial instruments. In addition, the Commission has outlined plans for potential future regulation of crypto-assets which do not qualify as financial instruments. Although those crypto-assets are not directly regulated by Serbian law, significant number of regulation in force applies to them depending on the legal transaction itself. Regarding crypto-assets deems necessary to introduce the Crypto-asset Agents which, among other things, would be obliged to advice the issuer of these assets about their obligations. It is also introduced the notion of whitepaper that would be similar to a prospectus published when securities are issued, but simpler. The whitepaper should contain prescribed information and be signed by the manager member of the crypto-asset issuer. Another possible solution for the regulation of this area is introduction of license to provide services whereby anyone who intends to provide the service of the issue / trade in crypto-assets is required to obtain the license.

In its call the Commission asked all interested parties a dozen question, aimed at directing the entire consultation process. What the Commission emphasizes all ideas and proposals for the regulations of the crypto-assets should be in accordance with the regulation of this area within the European Union. The reason is that Serbia would not depart from the regulations in this area that were adopted or will be adopted within European Union.

Copyrighted from the Securities Commission website.

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