The European Union has cautioned that customers risk losing all their money invested in crypto-assets and might fall victim to fraudsters.
Releasing a joint statement on Thursday, March 17, the European Union’s securities, banking, and insurance watchdogs confirmed that crypto customers have no rights or access to compensation under current EU financial services legislation.
It marks a ratcheting up of direct warnings to consumers about crypto assets by EU authorities, as financial regulators are increasingly worried that more consumers are buying 17,000 different crypto assets, including bitcoin and ether, which account for 60 percent of the market, without being fully aware of the risks, the regulators said.
“Consumers risk the very real potential of losing all their invested money if they acquire these assets,” the three EU regulators said in a statement.
“Consumers should be sensitive to the hazards of deceptive ads, especially through social media and influencers. Consumers should be extremely careful of promised rapid or large returns, especially those that appear too good to be true,” the warning stated.
Consumers should also be informed that energy usage for creating various crypto assets is considerable and presents a direct effect on the environment.