Consumers risk losing all of their money invested in crypto assets and falling victim to scams, according to a joint statement issued by the European Union’s securities, banking, and insurance watchdogs on Thursday.
“Consumers face the very real risk of losing all of their invested money if they purchase these assets,” said the three EU authorities in a joint statement.
It represents an increase in EU authorities’ direct warnings to consumers about crypto assets, emphasizing that consumers have no protections or recourse to compensation under existing EU financial services law.
Regulators are increasingly concerned that more consumers are purchasing 17,000 different crypto assets, including bitcoin and ether, which account for 60% of the market, without fully understanding the risks, according to the regulators.
“Consumers should be wary of misleading advertisements, including those distributed through social media and influencers. Consumers should be wary of promises of quick or high returns, especially if they appear too good to be true “According to the statement.
Consumers should also be aware of the high energy consumption required to produce some crypto assets, as well as the environmental impact this has, according to the statement.
It represents an increase in EU authorities’ direct warnings to consumers about crypto assets, emphasizing that consumers have no protections or recourse to compensation under existing EU financial services law.
