The three European Monetary Supervisory Authorities today issued a warning to consumers regarding "very dangerous and speculative" cryptocurrency investments.
The European Banking Authority (EBA), the European Securities and Markets Authority (ESMA), and the European Insurance and Occupational Pensions Authority (EIOPA) issued an unified warning today about cryptocurrency.
In a statement, the ESAs said the warning “comes in the context of growing consumer activity and interest in crypto-assets,” as well as the “aggressive promotion of these assets and related products to the public, including through social media.”
The ESAs have warned customers about the risks associated with cryptocurrency, stating that they “face the very real possibility of losing all their invested money.”
Additionally, the association cautioned consumers to be wary of deceptive marketing on social media and from influencers. Additionally, consumers should be "very suspicious" of promises of quick, big returns.
Additionally, the regulatory authorities have issued a harsh warning to consumers to be aware of the lack of protection accessible to them, as crypto assets "usually fall outside the protection provided by present EU financial services legislation."
The trio also applauded the European Union's Council's confirmation that restrictive actions against Russian and Belarusian organizations and persons will include crypto.
Additionally, the ESAs have advised consumers that:
• They may lose all of your money.
• Prices can fluctuate dramatically over short periods of time.
• Customers may become a victim of fraud, operational faults, or cyber-attacks; and
• Those impacted are unlikely to have any recourse or protection if something goes wrong.
There are already over 17,000 distinct crypto assets, however Bitcoin and Ethereum account for over 60% of the market.
Additionally, the ESAs have warned customers about the energy consumption of some crypto assets and advised them to be mindful of their environmental effect.
By fLEXI tEAM