Lacking legislation
But despite the drama and the dangers highlighted, the authorities have failed to act decisively, say professionals from the world financial technology, or fintech.
“The CNB could have been more outspoken about projects like this,” suggests Maria Staszkiewicz, CEO of the Czech Fintech Association. Other EU countries such as France or Germany would likely have come down harder on a project like Xixoio, Staszkiewicz claims.
A source close to the government claims that the Finance Ministry, which is responsible for writing regulatory law, has been loath to take on a new and complex area. That has left a loophole in Czech legislation. “The Czech civil law definition currently does not include investment tokens among securities,” a CNB spokesperson told BIRN.
And that means they’re not supervised. But that was about as far as the central bank’s warnings have gone, which has caused some bemusement.
“The CNB’s main worry has been Xixoio’s suggestion that it’s approved or working alongside the regulator,” says Jan Šovar at finreg, a Prague law office specialising in fintech.
A source close to the government goes a step further. “Richard Watzke is free-riding on the fact that the Finance Ministry and CNB don’t want to act,” the source says. “He’s stolen an important idea and is exploiting the lack of regulation to put together a scam.”
Brussels butts in
New EU rules, aimed at closing this loophole by expanding the definition…
