18 Mar Eu regulators warn Crypto users
Consumers who invest in crypto assets risk losing all of their money and becoming victims of frauds, according to a joint statement released by the European Union’s securities, banking, and insurance watchdogs on March 17.
According to the regulators, If consumers purchase these assets, they risk losing all of their invested funds.
It marks a step up in EU authorities’ direct cautions to consumers about crypto assets, stating that customers have no protections or access to compensation under existing EU financial services regulation.
Regulators are growing concerned that more people are purchasing 17,000 various crypto assets, including bitcoin and ether, which account for 60% of the market, without fully understanding the risks, according to the regulators.
According to a joint statement issued by the European Banking Authority (EBA), the European Securities and Markets Authority (ESMA) and the European Insurance and Occupational Pensions Authority (EIOPA), consumers should be alert to the risks of misleading advertisements, including via social media and influencers. Consumers should be particularly wary of promised fast or high returns, especially those that look too good to be true.
According to the statement, consumers should also be aware of the significant energy consumption required to produce some crypto assets and the resulting environmental impact.
Therefore, those who use crypto can become victims of fraud at any time, with no protections or recourse available under current EU financial services legislation.