Originally published on: September 29, 2024
The Dutch Authority for the Financial Markets (AFM) has issued a caution regarding the dangers of cryptocurrency pump-and-dump schemes as the Markets in Crypto-Assets Regulation (MiCA) draws near.
MiCA is set to take effect on December 30, bringing with it explicit prohibition of market manipulation practices within the European Union.
With the responsibility to oversee and enforce these new regulations in the Netherlands, the AFM aims to combat fraudulent practices in the crypto sector.
Pump-and-dump schemes, specifically targeted under MiCA, seek to artificially inflate asset prices through deceptive tactics, such as spreading misleading information on social media platforms.
To prepare for the regulatory changes, the AFM has been actively investigating pump-and-dump cases in recent months, positioning itself for rigorous enforcement post-MiCA implementation.
Hanzo van Beusekom, a member of the AFM’s executive board, emphasized the importance of trust in the crypto market, stating that pump-and-dump schemes erode this trust crucial for the growth of digital assets.
While the AFM’s stance aligns with MiCA guidelines, concerns loom over a potential shift of Web3 firms to the Middle East to evade the stringent regulatory framework.
Anastasija Plotnikova, CEO of Fideum, voiced apprehensions about increased centralization in the industry, fearing that the regulations could prompt a consolidation resembling traditional finance practices.
Ahead of the MiCA rollout, investors are urged to remain vigilant against pump-and-dump schemes, as regulatory crackdowns intensify to safeguard the integrity of the crypto sector.
