Ovunc Kutlu
March 17, 2022•Update: March 17, 2022
ANKARA
Three EU financial regulators on Thursday warned consumers about risks surrounding cryptocurrencies.
The European Supervisory Authorities – European Banking Authority (EBA), European Securities and Markets Authority (ESMA) and European Insurance and Occupational Pensions Authority (EIOPA) – warned consumers that many crypto assets are highly risky and speculative.
"These are not suited for most retail consumers as an investment or as a means of payment or exchange," they said in a joint report.
"Consumers face the very real possibility of losing all their invested money if they buy these assets," they added.
The regulators said consumers should be alert to the risks of misleading advertisements, including via social media and influencers, and they should be wary of promised fast or high returns.
They stressed that crypto assets, and related products and services, typically fall outside the existing protection under current EU financial services rules.
"You are unlikely to have any rights to protection or compensation if things go wrong," they said.
Some of the key risks included in the report are extreme price movements, misleading information, absence of protection, and product complexity.
Other risks include fraud and malicious activities, market manipulation, lack of price transparency, low liquidity, hacks, operational risks and security issues.
