Users must be aware of the very serious risk of losing all their holdings if they purchase cryptocurrency, according to a group of key EU financial authorities.
A group of leading European Union (EU) financial authorities advised customers on Thursday that investing in digital currencies carries the risk of losing all of their investment.
The financial regulators stressed that cryptocurrencies are extremely dangerous and that adequate user protection safeguards are required, which are now lacking in the European Union.
The European Supervisory Authorities (ESAs) released the cautionary memo, which is composed of the European Banking Authority (EBA), the European Securities and Markets Authority (ESMA), and the European Insurance and Occupational Pensions Authority (EIOPA).
The financial regulators of the EU emphasized “face the very real possibility of losing all their invested money if they buy these assets,” including displaying caution of deceptive ads on social media and via influencers and advocates. The message also cautioned that crypto holders “should be particularly wary of promised fast or high returns, especially those that look too good to be true.”
The message included the following: “the ESAs also warn consumers that they should be aware of the lack of recourse or protection available to them,” also emphasizing that cryptocurrency regulations are going through the legislation process in the European Union.
On Monday, the planned Markets in Crypto Assets (MiCA) legislative framework for controlling crypto assets won a parliamentary committee vote and is therefore going on to the upcoming round of EU government discussions before getting confirmed.