Benzinga - The crypto sector, as it currently is, has been described as a “Wild West” filled with "fraudsters and thieves."
To maintain control, European Parliament suggests crypto assets should be classified as securities by default.
This recommendation also pushes for the provision of legal status to decentralized finance (DeFi) governing bodies, referred to as autonomous organizations.
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The study emerged as the European Union (EU) wraps up its Markets in Crypto Assets (MiCA) regulation and contemplates additional legislation for DeFi, staking, and non-fungible tokens (NFTs).
"Unless proven otherwise by a national regulator, all crypto assets should be recognized as transferable securities," the report says, comparing them to stocks and bonds.
The report was crafted by a group of scholars from universities in Luxembourg, Sydney, and Hong Kong, commissioned by the European Parliament’s Economic and Monetary Affairs Committee.
The report also expresses concerns about the imminent MiCA regulation, predicting potential short-term enforcement issues in a non-transparent, cross-border context where countless crypto protocols compete for the least restrictive regulatory environment.
The ongoing lack of clarity regarding the application of traditional financial securities rules to digital assets has been a persistent issue for the crypto industry.
In the U.S., Securities and Exchange Commission chief Gary Gensler hasn't explicitly classified major cryptocurrencies like Bitcoin (CRYPTO: BTC) and Ether (CRYPTO: ETH), as securities under his jurisdiction.
With the formalization of MiCA regulation on Wednesday, it falls upon EU agencies overseeing banking and securities markets to devise detailed rules for its implementation.
Prior to this, the European Systemic Risk Board, an EU body monitoring financial stability risks, has urged for additional laws to address the gaps left by MiCA.
The report also mentions that experts in the U.K. have been analyzing the legal status of decentralized autonomous organizations (DAOs).
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