• The European bloc’s supervisory bodies claim that cryptocurrency investors have no protection against scams or losses.
• They also point out the volatility and high risk of cryptocurrencies, which are mainly determined by their demand.

The European Union’s regulators have again warned that cryptocurrency investors are at risk. In a statement published on Thursday, the bloc’s authorities said that digital assets are “risky” and “speculative” and discourage retail savers from using them as an investment or as a means of payment.

According to Reuters, “Consumers could lose all their money,” the warning was made. This warning was issued by the European Banking Authority along with the European Securities and Markets Authority and European Pension and Retirement Insurance Authority.
European supervisory bodies have warned that crypto-investors are not protected. The supervisors point out they cannot claim in any case and they are not covered by financial regulations.

The regulators urge users to exercise caution when making such an investment. Especially if the decision has been encouraged by “misleading advertising”, which abounds in social networks and influencer accounts in which high rates of return or very quick profits are promised.

“You may be a victim of scams, fraud or cyberattacks”

The statement stated that the supervision bodies encouraged people to consider other risks.

“Prices can go down and up quickly in short periods; you may be a victim of scams, fraud, operational errors or cyber attacks; And it is unlikely that you will have rights to protection or compensation if something goes wrong”, the statement said.
They also encourage crypto investors to consider whether they’re willing to risk all of their capital and take on big losses. It is also important to make sure they know if their private keys are secure and that the crypto-related devices they store, buy and trade are protected.

According to the European Statement text, it urges investors not to trust money to companies that have bad reputations.

“Many crypto assets suffer from sudden and extreme price fluctuations and are speculative in nature,” they note. They note that the prices of cryptocurrency are often determined by consumer demand. Furthermore, they don’t have backing and you can lose large amounts of money.
The chorus of warnings from the European authorities have been joined by the CNMV, the Bank of Spain and the General Directorate of Insurance and Pension Funds, according to the newspaper El País on Thursday. Spanish regulators listened to the European bloc regulators’ warning and recall having issued similar alerts in 2021 and 2018.

The Flipside

• This week it was also learned that the International Monetary Fund asked the Argentine government to take measures to “discourage” the use of cryptocurrencies in that country.
• In a sign of government readiness to face private cryptocurrencies, the international lender promotes central bank digital currencies (CBDCs) issuance.

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