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According to ESMA chief, cryptocurrency investors should learn a"cautionary lesson" from the crash

The head of Europe's securities regulator has advised investors in highly volatile cryptocurrencies to learn a "cautionary lesson" from the recent market crash.

The head of the European Securities and Markets Authority (ESMA), Verena Ross, warned cryptocurrency investors about the "serious risks" they were taking.

According to Ms. Ross, "we already warned earlier this year… about the serious risks retail investors were taking investing in some of the crypto assets."

"I think there is a real question about whether many of these [crypto assets] will survive… I hope that some of these investors will see this and will take a cautionary lesson, at least, to think about how much of their money they invest in these kinds of assets," she continued.

The ESMA chair also cautioned investors that since the volatility in cryptocurrencies was well known, they would not be eligible for a European bailout.

According to Ms. Ross, "We have all said that this is something that is not currently regulated, not something where this is any control over the providers, [where] we know there is a lot of fraud and aggressive marketing going on."

Last month, the EU Council approved the historic Markets in Crypto-Asset Regulation (MiCA), giving ESMA new authority to ban or restrict crypto platforms if they are thought to be endangering financial stability or improperly protecting investors.

The regulatory framework, according to a statement from the Council, will "protect investors and preserve financial stability" while also promoting "innovation and fostering the attractiveness of the crypto-asset sector."

Additionally, MiCA is anticipated to increase EU-wide crypto-clarity and prevent member-state fragmentation.

The urgent need for an EU-wide regulation has been confirmed, according to Bruno Le Maire, France's minister of the economy, finance, and industrial and digital sovereignty.

He continued, "MiCA will better protect Europeans who have invested in these assets and prevent the misuse of crypto-assets, while being innovation-friendly to maintain the EU’s attractiveness."

The historic regulation, according to Mr. Le Maire, will "put an end to the crypto wild west" and "confirms the EU's role as a standard-setter for digital topics," he added.

According to MiCA, crypto asset providers will be held accountable if they misplace an investor's crypto assets and will have to safeguard their clients' wallets.

The European Banking Authority will be required by MiCA to keep a public register of non-compliant crypto asset service providers, and these providers will also be required to disclose information about their environmental and climate footprints.


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