EU Regulators Warn Crypto Unsuitable as Investment or Means of Payment for Most Retail Consumers – A joint warning on crypto assets has been issued by many European regulators. “These assets are not suitable for most retail users as an investment, exchange, or payment” they said.
Three European Supervisory Authorities (ESAs) on Thursday released a joint statement warning about the dangers of crypto assets.
“Many crypto assets are highly dangerous and speculative,” said the European Insurance and Occupational Pensions Authority (EIOPA), the European Banking Authority (EBA), and the European Securities and Markets Authority (ESMA). In addition, “important steps consumers may take to ensure they make educated selections” are outlined in their statement.
The warning came as a result of “interest in crypto assets and increasing consumer activity, as well as active public promotion of those assets and related items, especially through social media,” according to the regulators.
According to the supervisory authorities:
Most retail consumers will not be able to invest in, or use, these assets as a form of payment or exchange.
Consumers “stand the very real risk of losing all of their invested money if they buy these assets,” they said.
Furthermore, the ESAs advised consumers to “be skeptical of promised fast or high returns, especially those that appear too good to be true,” and to “be sensitive to the risks of deceptive promotions, notably via social media and influencers.”
Consumers should also be aware of “the lack of appeal or protection available to them,” according to the ESAs, because “crypto-assets and related products and services often fall outside existing protection under current EU financial services legislation.”
Because the European Commission’s proposal for Markets in Crypto Assets (MiCA) is still awaiting the outcome of the co-legislative process, consumers are not currently protected by any of the safeguards included in that proposal because it is not yet EU law, according to the EBA.
Earlier this week, the European Parliament’s Committee on Economic and Monetary Affairs (ECON) voted against an amendment to prohibit EU corporations from owning proof-of-work assets.