Investors must face the possibility of losing all their money in crypto assets, a group of top financial regulators in the European Union (EU) warned consumers on Thursday.
The regulators warned that crypto assets are “highly risky” and sufficient measures are needed to protect consumers, which currently do not exist in the EU.
The message was published by the European Supervisory Authorities (ESAs) made up of the European Banking Authority (EBA), the European Securities and Markets Authority (ESMA) and the European Insurance and Occupational Pensions Authority (EIOPA).
The group said that crypto investors must “face the very real possibility of losing all their invested money if they buy these assets” adding that investors should also be privy to misleading advertisements, even on social media and via influencers. It also warned that crypto investors “should be particularly wary of promised fast or high returns, especially those that look too good to be true.”
“The ESAs also warn consumers that they should be aware of the lack of recourse or protection available to them,” the message read, adding that the proposed regulations for crypto in the EU is still moving through the union’s legislative process.
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