Crypto investors risk losing all their money invested in speculative “too good to be true” cryptoassets and could fall prey to scams—the European Union’s securities, banking and insurance regulators said in a joint statement published last March 17.
The advisory was issued by the three European Supervisory Authorities; Euro Banking Association (EBA) European Securities and Markets Authority (ESMA) and European Insurance and Occupational Pensions Authority (EIOPA).
“Consumers face the very real possibility of losing all their invested money if they buy these assets,” the EU authorities said in a statement.
This is the first statement concerning the risks of cryptocurrency and, alongside its scaling mass adoption, would likely be followed by more direct warnings by EU authorities about crypto assets. The EU watchdogs spell out that consumers have no protections or recourse to compensation under existing EU financial services law.
Following the constant increase with the number of consumers buying 17,000 different crypto assets, regulators are also increasingly worried about them purchasing without being fully aware of the risks.
“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,” the statement said.
Moreover, the statement also mentioned that consumers should be aware that energy consumption for producing some crypto assets is high and the significant impact the technology has on the environment.
In the Philippines where cryptocurrency is also rapidly growing, the Securities and Exchange Commission (SEC) still emphasizes that the investing public must be cautious in dealing with digital and cryptocurrency investments.
While the Banko Sentral ng Pilipinas (BSP) stresses that they still do not encourage people to invest in cryptocurrency and due diligence is a must before engaging. (Read more: BSP, SEC Do Not Encourage the Public to Invest in Crypto)
This article is published on BitPinas: EU Regulators: Be Ready to Lose All Your Money in Crypto
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