Tech

Bitcoin: the EU assures that cryptocurrency investors risk losing everything

The European Union warns investors in the cryptocurrency sector. According to European regulators, people who have invested in Bitcoin, Ether or another digital currency risk losing everything.

bitcoin course

The European Banking Authority (EBA), the European Insurance and Occupational Pensions Authority (EIOPA) and the European Securities and Markets Authority (ESMA) have warned investors of the cryptocurrency industry.

In a press release published this Thursday, March 17, 2022, the three regulatory agencies of the European Union estimated that individuals who have converted their assets into crypto-assets, such as Bitcoin or Ether, risk lose all their savings. In the past, several organizations have posted similar warnings.

EU advises crypto investors to remain cautious

“Many digital assets are very risky and speculative”says the press release, which points out that “consumers face the very real possibility of losing all of their invested money if they purchase these assets”. European regulators seem to be unaware of the existence of stablecoins, these currencies whose course is backed by the euro or the dollar. De facto, the value of these cryptocurrencies is stable.

“These assets are not suitable for most retail consumers as an investment or a means of payment or exchange,” believe the three authorities. Regulators say they want protect European investors whereas “interest in digital assets is growing” and that the “aggressively promoting these assets and related products to the public, including through social media”generalizes.

The financial policemen point the finger communication campaigns put in place by players in the cryptocurrency industry. The press release encourages investors to beware “quick or high returns promised, especially those that sound too good to be true”.

Considering the ads sought to mislead consumers, regulators have banned several ads in recent months. In January, several communications from the Crypto.com platform, which promises high returns through lending offers, have been censored in the UK. Industry players should be careful with the words and phrases used to avoid censorship.

Finally, regulators point out that the operation of cryptocurrencies such as Bitcoin has a significant environmental impact. This speech comes a few days after Europe temporarily gave up banning the most polluting cryptocurrencies, namely currencies based on Proof of Work. The article strictly regulating the mining of cryptos has not been inserted in the MiCA regulations (Market in Crypto Assets).

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