Today, the European Supervisory Authorities have warned consumers. They have warned that many crypto-assets are highly risky and speculative. The ESAs outline key steps consumers can take to make informed decisions. This warning comes amid increased consumer activity and interest in crypto-assets, as well as aggressive public promotion of those assets and related products, including via social media.
In their warning, the ESAs highlight that these assets are not suited for most retail consumers as an investment or as a means of payment or exchange. It is so because consumers face the very real possibility of losing all their invested money if they buy these assets, should be alert to the risks of misleading advertisements, including via social media and influencers and should be particularly wary of promised fast or high returns, especially those that look too good to be true.
The ESAs also warn consumers about the lack of recourse or protection available to them, as crypto-assets and related products and services typically fall outside of existing protection under current EU financial services rules.
The ESAs also warn consumers about the lack of recourse or protection available to them, as crypto-assets and related products and services typically fall outside of existing protection under current EU financial services rules.
In light of the current situation in Ukraine, and in order to ensure the proper implementation of the sanctions in place, the ESAs welcome the clarification by the European Union Council of the scope of the restrictive measures against Russian and Belarusian entities and individuals regarding crypto-assets.
This warning is based on previous similar messages from EU regulators, such as the ESAs’ founding regulations, a joint-ESA warning issued in 2018, and a statement issued in March 2021.
