(Reuters) – As the European Commission is considering that the EU needs rules for cryptographic and virtual currency trading, the EU states continue with their own rules, with the smallest of them, Malta, leading the packaging.  The risks of investing in the industry were released last year when bitcoin, the most successful crypto curve, lost three quarters of its value from a peak around $ 20,000 by the end of 2017. The market value of crypto-based assets fell to $ 110 billion at the end of January from $ 830 billion a year earlier.
These market developments have occurred in a "legal vacuum", says Robert Ophele, head of the French Financial Controller. At a financial engineering conference in Brussels, he urged the European Commission to propose new rules for managing risks.
Last month, EU regulators demanded new rules to prevent money laundering and protect investors. But the Commission, the only source of new EU legislation, has so far avoided taking action, to fear that it will hinder the growing industry.
"We must ensure that our financial sector rules do not inadvertently impede useful innovation" The Commissioner for Financial Services, Valdis Dombrovskis. Brussels was still considering whether EU action was necessary, he said.
Individual EU states move in vacuum despite the risks of uncoordinated action being able to weaken the EU market. The French Parliament passes the encryption legislation and Germany's Finance Ministry has begun to consult on a blockchain strategy that will be published before the summer.
Smaller states face them. Luxembourg has adopted its rules this year and the Baltic countries have long been active in the industry, says industrial consultant Peter Moricz.
The boldest is Malta, which has established a broad regulatory framework and aims to become Europe's cryptoram. [1
Mediterranean island is already home to the EU's largest gaming industry and a large financial services sector that has been pulled there by advanced regulation and low taxes.
But these successes have been scared in part by foreign investigations by several gaming companies and banks on the island which have postponed weak enforcement by local authorities.
"As a result of these failures, we have learned how to strengthen our monitoring," said Christopher Buttigieg, a parent overseer at the Malta Financial Services Authority.