Italian financial regulator takes action against fraudulent investment sites

Consob, the financial regulator in Italy, recently made a move against several financial websites as part of the ongoing effort to protect investors from fraudulent sites.

The financial watchdog blocked several major sites, including some that were licensed in other jurisdictions, as its investigation suggested that the websites may not be safe for Italian users. The effort comes as part of Italy’s proactive stance toward online and digital assets trading.

Consob bans four new trading sites

The country’s efforts have already been noticed by others, and some have even modeled their efforts on grappling with similar challenges, as the regulations regarding digital trading and investing remain unclear.

Consob announced recently that it had blocked four new websites that traders should know to avoid moving forward, including FP Invest, XTB Empire Ltd, PRIMUSLTD, and Simple Trading/Simple Trade.

According to the agency, these platforms were banned for illegally promoting trading products in Italy. They were unlicensed and unregulated, and even if one or more of them had a license in a different jurisdiction, this did not give them the right to offer their services in Italy.

Consob’s action against the mentioned platforms was supported by the local law known as Decreto Crescita, which grants Censob the right to obstruct the local investors’ access to specific online brokers. This is not a new initiative, as Consob has been banning similar domains for years. Its list of banned investment platforms that were deemed suspicious, unlawful, or that otherwise had to be removed consists of over 945 domains at this time.

Italian regulators have their hands full with crypto firms

The Decreto Cresita decree also grants the financial watchdog the power to order the local internet service providers (ISPs) to block sites that operate in the region illegally. Due to technical reasons, there could be a delay of several days before the websites disappear and are no longer accessible to the public, especially if they are currently shut down, and the ISPs have to wait for them to come back online before banning their IP addresses.

But, while Consob is nearing the 1,000 banned domains mark, most of them simply offer trading services, claiming that they will let investors access CFDs, cryptocurrencies, and other products.

This made the regulator concerned about potential risks and regulatory issues associated with crypto trading, especially since the crypto industry is barely regulated even in the nations that are ahead of others in terms of crypto regulatory clarity.

Even the regulated and fully legal crypto trading establishments tend to step in a regulatory gray area, sometimes accidentally, as they are often unsure of what to do. For example, earlier this year, Italy’s antitrust authority issued a 1.3 million EUR fine to eToro for misleading the users about the true cost of its stock trading offering.

There have been other similar cases for years now, but intil the crypto industry is adequately regulated, financial authorities will have to make do with what they have, and the same is true for crypto companies.