EU regulators warn consumers against investing in' high-risk' crypto coins

in criptomonedas •  7 years ago 

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European Supervisory Authorities (ESAs) warned customers that cryptomoney coins are "highly risky" assets that show "clear signs of a price bubble" in a warning to pan-European consumers published on Monday 12 February.
The ESAs are composed of the European Securities and Markets Authority (ESMA), the European Banking Authority (EBA) and the European Insurance and Occupational Pensions Authority (EIOPA).

The high risk associated with investment in cryptomoney according to SWAps means that investors can "lose a large amount, or even the entirety, of the money invested:

"SWAps warn consumers that VCs (virtual currencies) are highly risky and unregulated products and are not suitable as investment, savings or retirement planning products."

The warning, posted on the ESMA website, comes with an introduction that explains the fear that too many people are investing in crypto coins without fully understanding the risks.

The official warning also brings up the idea that unregulated exchanges are unprotected due to their existence outside of global financial regulations, which means that the loss of a customer from an event such as a cyber attack would not be covered by EU legislation.

The SWAp warning ends with advice for investors to protect themselves:

"You shouldn't invest money you can't afford to lose."

The ESMA had previously warned customers in November 2017 about the Initial Coin Offers (ICOs), citing the same reasons for investors' lack of understanding and problems with unregulated financial activities.

The latest warning from SWAps comes after the European Central Bank (ECB) told CNBC on 7 February that cryptoregulation "is not on the to-do list". In contrast, on 8 February, a member of the ECB's Executive Board referred to cryptomoney as a "contagion" and "contamination" and called for preventive regulation.

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