Consumers must accept the “very real potential” of losing all their money when it comes to cryptocurrency, according to the watchdogs.
Investors must be prepared to lose their whole investment in crypto assets, a group of senior European Union (EU) financial authorities advised consumers on Thursday.
The authorities emphasised that crypto assets are “very dangerous” and that consumer protection safeguards not yet in place in the EU are required.
The European Supervisory Authorities (ESAs) issued 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) (EIOPA).
The organisation said that cryptocurrency investors must “accept the very real danger of losing all of their invested money” if they purchase digital assets, noting that investors are subjected to false ads, including those on social media and via influencers. Additionally, it cautioned crypto investors to “be extremely suspicious of promises of rapid or large profits, particularly those that seem too good to be true.”
This warning is based on earlier comparable signals from EU authorities, 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 said, noting that the EU’s planned crypto laws are still in the legislative process.
The proposed Markets in Crypto Assets (MiCA) regulation package for regulating digital assets was approved by a parliamentary committee on Monday and will now go to the next level of discussions between EU member states before being confirmed.
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