The EU’s financial supervisory authorities on Thursday warned consumers that many crypto-assets are highly risky and speculative. The authorities - including the bodies that supervise securities markets and the banking sector, set out key steps consumers can take to ensure they make informed decisions.
The warning comes in the context of growing consumer activity and interest in crypto-assets and the aggressive promotion of those assets and related products to the public, including through social media, said the European Securities and Markets Authority, the European Banking Authority and the European pensions and insurance authority Eiopa in a joint communication.
“These assets are not suited for most retail consumers as an investment or as a means of payment or exchange, as consumers face the very real possibility of losing all their invested money if they buy these assets,” they said.
Consumers 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 lack of recourse or protection available to them also is something that consumers need to consider, as crypto-assets and related products and services typically fall outside existing protection under current EU financial services rules, the EU regulators said.
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