European supervisory authorities have come together to warn that cryptocurrencies they are unsuitable products for retail investors and the risk of losing everything is real.
In addition, they add, it is very unlikely that they have any right to protection or compensation for the loss.
This is established in a joint statement by the European Banking Authority (EBA), the insurance authority (EIOPA), the stock market authority (ESMA) and the Joint Committee of European Authorities.
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The monitors note that in “the context of growing consumer activity and interest in crypto assets and the aggressive promotion of those assets and products to the public, including through social media,” consumers should be on the lookout for misleading advertising, even from influencers, and be wary of promises of fast or high returns.
They also remind that most crypto assets “are not regulated in the EU”, so, in the event of loss, users will not benefit from protections such as claim mechanisms. In addition, they brand the products as “complex”, with extreme price movements.
“Many crypto assets are subject to price movements and are speculative, as their price usually depends solely on consumer demand,” they stated.
