Consumers must accept the “very real possibility” of losing all their money if they purchase cryptocurrency, according to a panel of the EU’s top financial authorities.
Investors must accept the danger of losing their entire investment in crypto assets, a group of the European Union’s (EU) top financial authorities advised consumers on Thursday.
The regulators warned that crypto assets are “very dangerous” and that adequate consumer protection safeguards are required, which presently do not exist in the EU.
The European Supervisory Authorities (ESAs) sent the statement, which is composed of the European Banking Authority (EBA), the European Securities and Markets Authority (ESMA), and the European Insurance and Occupational Pensions Authority (EIOPA).
The group stated that crypto investors must “be prepared to lose all of their invested money if they purchase these assets,” adding that investors should also be aware of false ads, including those on social media and via influencers. Additionally, it cautioned crypto investors to “be extremely suspicious of promises of rapid or high returns, particularly those that appear too good to be true.”
This warning is based on earlier similar signals from EU regulators, such as the ESAs’ foundation legislation, a joint-ESA warning from 2018, and a March 2021 declaration.
“The ESAs also caution consumers about the lack of remedies or protection accessible to them,” the statement continued, noting that the EU’s proposed crypto laws are still in the legislative process.
The proposed Markets in Crypto Assets (MiCA) regulatory package for regulating digital assets was approved by a parliamentary committee on Monday and will now proceed to the next level of negotiations between EU member states before being confirmed.
Disclaimer: These are the writer’s opinions and should not be considered investment advice. Readers should do their own research.
