The chairman of the European Securities and Markets Authority has indicated he supports applying financial instrument regulation to assets such as bitcoin to help protect investors.

Without new rules, Steven Maijoor said, digital assets will likely fall outside of the regulation of Europe’s securities laws.

[EU reports on cryptoasset regulation could have global reverberations]

“Where crypto-assets do not qualify as financial instruments,” Maijoor said in the text of the speech to the FinTech Conference 2019 earlier this week in Brussels, “we are concerned that the absence of applicable financial rules leaves consumers exposed to substantial risks.”

His statements follow reports by ESMA and another European regulator that recommended the creation of a bespoke regime for crypto assets.

U.S. regulators are grappling with some of the same questions on crypto assets that don’t fall into readily defined financial categories. States, for example, vary on whether they require virtual currency companies to have money transmissions licenses, while direct transactions of cryptocurrencies are unregulated by the federal government as long as they don’t constitute fraud.

Because crypto asset transactions may routinely cross national borders, it’s unclear how, or to what extent, diverse regulatory regimes will cooperate.

Maijoor wants to apply new rules to initial coin offerings as well, where organizations raise cash in return for digital tokens or coins that can be used to make future purchases and may fluctuate in value. In the U.S., there is no consensus on whether these are securities, though regulators have taken action when investors have looked to them as speculative investments.

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The Securities and Exchange Commission charged organizers of some coin offerings with violating of federal securities laws, mainly regarding offer terms and disclosure.

Maijoor said most European jurisdictions agree that crypto assets should be regulated if they have attached profit or dividend rights, making them similar to traditional financial instruments. He said he supports expanding Europe’s money laundering requirements to include those involved in the exchange of one crypto asset for another, and not just the exchange of one for currency.

That would mean much more involvement than what’s currently contemplated in the U.S.

Other digital assets provide utility or consumption rights, and others, including bitcoin, may be set up as a means of exchange. These differences make the job of regulators harder, he says.

“This makes it plain to see that we cannot legally qualify crypto-assets via a ‘one size fits all’ approach,” Maijoor said.