Consumers who engage in cryptoassets risk losing all of their money and falling victim to frauds, according to the European Union.
The European Union’s securities, banking, and insurance watchdogs released a joint statement on Thursday, March 17 revealing that crypto consumers have no protections or access to compensation under existing EU financial services law.
It is the latest in a series of direct warnings from EU authorities to consumers about cryptoassets, as financial regulators become increasingly concerned that more people are buying 17,000 different cryptoassets, including bitcoin and ether, which account for 60% of the market, without fully understanding the risks, according to the regulators.
“If consumers buy these assets, they risk losing all of their invested money,” the three EU authorities said in a statement.
“Consumers should be aware of the dangers of deceptive advertising, which can be spread through social media and influencers. Consumers should be careful of promises of quick or substantial returns, especially if they appear to be too good to be true “According to the statement.
Consumers should also be informed that the energy required to produce some cryptoassets is significant, posing a direct environmental risk.