On 17 March 2021, the European Supervisory Authorities (EBA, EIOPA and ESMA – theESAs) issued a reminder alert to consumers that some crypto-assets are highly risky and speculative and, as stated back in February 2018 in the ESAs’ then joint warning, here, users must be alert to the high risks of buying and/or holding these instruments, including the possibility of losing all their money.
Crypto-assets are quite diverse in nature and come in many forms but the majority remain unregulated in the EU as the regulators and states seem unable to keep up with the technological advances or speed at which such instruments pop up around the globe. This means that a consumer, buying and/or holding these instruments, does not benefit from the guarantees and safeguards associated with regulated financial or banking services. In September 2020, the European Commission presented a legislative proposal for a regulation on markets in crypto-assets which remains to this day subject to the outcome of the co-legislative process leaving consumers still unable to benefit from the aforementioned proposed legislative safeguards until this is enacted into EU law.
The news release can be found here.
Our blog post on the European Commission’s crypto-assets (MiCA) proposal can be found here.