EU regulator warns virtual currencies may lead to huge losses for users

Consumers are at risk of losing all their money invested in crypto-assets and could fall victim to scams, EU securities, banking, and insurance watchdogs reportedly said in a joint statement on Thursday.

The three EU regulators said in the statement that”Consumers face a high probability of losing all their investment funds if they buy these assets,”.

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This marks a step up by EU authorities of direct warnings to consumers about crypto assets, indicating that consumers have no protection or recourse under existing EU financial services law.

Regulators say consumers are increasingly buying up to 17,000 different crypto assets, including bitcoin and Ethereum, which account for 60 percent of the market, without fully recognizing the risks.

In the statement, the regulator said: “Consumers should be wary of misleading advertising, including through social media and influential bloggers. Consumers should be particularly wary of promising quick or high returns. , especially ads that look too good to be true.”

Moreover, the regulator also said in the statement that consumers should also be aware that producing these crypto-assets requires a lot of energy and has an impact on the environment.

(via)