EU to take help from crypto data to regulate "Wild West"

The European Securities and Markets Authority (ESMA) is monitoring crypto-asset firms in order to increase the security of crypto transactions. The EU's securities watchdog said the moves are to regulate the "Wild West" sector.

A public tender document showed that ESMA will start with watching bigger players in the field, reported Reuters. The organisation has put out a public procurement request to suppliers of trading data on crypto transactions, including spot trades and derivatives. It is worth a maximum of 100,000 euros.

The notice read that the coverage should encompass all major exchanges and crypto assets so that it provides a fair representation of the crypto market landscape.

Transactions from blockchain or distributed ledger technology will not come under scrutiny. Transactions data will be used to spot abuses in the markets and find out who is on each side of it. Regulators will also look for risky buildups of positions that can possibly undermine orderly markets.

The notice further said data should be available with daily frequency and include access to order books where to see spreads and liquidity across exchanges and trading pairs (in fiat and crypto).

The regulator is specifically looking for "crypto off-chain data" that do not originate from a blockchain. Such transactions include spot and derivatives trade at centralised exchanges or over-the-counter trading platforms, said ESMA.

The notice comes shortly after the European Council decided to create a separate Anti-Money Laundering authority to supervise certain crypto asset service providers.