The European Supervisory Authorities (EBA, ESMA and EIOPA – the ESAs) warn consumers that many crypto-assets are “highly risky” and speculative. The ESAs advised that sufficient measures are needed to protect consumers, which currently do not exist in the EU and set out key steps consumers can take to ensure they make informed decisions.
This warning comes in the context of growing consumer activity and interest in crypto-assets and the aggressive promotion of those assets and related products to the public, including through social media. The group said that crypto investors must “face the very real possibility of losing all their invested money if they buy these assets” adding that investors should also be privy to misleading advertisements, even on social media and via influencers. It also warned that crypto investors “should be particularly wary of promised fast or high returns, especially those that look too good to be true.”
The proposed regulations for crypto in the EU is still moving through the union’s legislative process. The Markets in Crypto Assets regulatory package passed through a parliamentary committee vote on 14 March and is now moving on to the next stage of negotiations between EU governments before being eventually ratified.