Italy is set to intensify its surveillance of the cryptocurrency market, with a new decree imposing fines of up to 5 million euros ($5.4 million) for market manipulation, insider trading, and other violations. The move is part of the country's efforts to implement the European Union's Markets in Crypto Asset (MiCA) regulatory framework.

According to a draft decree reviewed by Reuters, the fines will range from 5,000 euros to 5 million euros for various offenses, including insider trading, unlawful disclosure of inside information, and market manipulation. The decree, expected to be approved by the cabinet, also designates Italy's central bank and market watchdog, Consob, as the National Competent Authorities (NCA) responsible for supervising the crypto sector.

The move is part of a broader effort by EU countries to implement the MiCA framework, which aims to provide a harmonized regulatory approach to the crypto sector across the bloc. Italy has been preparing for the implementation of MiCA, despite a survey showing that only about 2% of Italian households hold "modest amounts" of crypto and that the exposure of Italian intermediaries to the market is limited.

The new decree comes as Italy's crypto sector is growing, with companies like Conio, a cryptocurrency wallet firm, partnering with Coinbase to bring digital assets to Italian banks and financial institutions. However, the country has also faced challenges in regulating the sector, including approving 73 firms as virtual currency service providers without proper checks to ensure their safety for investors.

The increased surveillance and regulation of the crypto sector in Italy are expected to provide a safer and more secure environment for investors and consumers, while also aligning with the EU's broader efforts to regulate the sector. The move is also seen as a positive step for the growth and development of the crypto industry in Italy and the EU.