ESA or the European Supervisory Authorities have pointed out to customers to stay cautious when it comes to crypto investing as it has clear signs of high risk in a consumer warning pan-EU released on Mon Feb 12.
The Supervisory is made of – the European Banking Authority [EBA], the European Securities and Markets Authority [ESMA] and the European Insurance and Occupational Pensions Authority [EIOPA].
The warning goes to the extend as investing in cryptocurrency could conclude with losing a larg amount or even all.
“The ESAs warn consumers that VCs (virtual currencies) are highly risky and unregulated products and are unsuitable as investment, savings or retirement planning products.”
The warning, published on the ESMA website, comes with an introduction that explains the fear that too many people are investing in crypto without fully understanding the risks.
The official warning also brings up the idea that unregulated exchanges are unprotected because of their existence outside of global financial regulations, meaning a customer’s losses from an event like a cyberattack would not be covered by EU law.
“You should not invest money you cannot afford to lose.”
In the same manner, back in Nov 2017 – ESMA has released a similar warning towards ICOs [Initial Coin Offerings] highlighting out the same issues of unregulated activities and individuals not fully understanding the risk.