Immediately three European regulators, responsible for the circulation of securities, banking products, and pensions, issued a warning for EU residents planning investments in crypto-currencies. They drew attention to the volatility of the сrypto market, the lack of a legislative basis for its regulation, the possibility of significant losses.
The European Securities and Financial Markets Service, the European Banking Supervision Service (EBA) and the European Insurance and Pension Organization (EIOPA) have issued a memorandum warning investors of “high risks associated with the purchase and / or storage of so-called virtual currencies”.
These organizations, collectively called the European supervisory authorities, warn of the high risk of “investors’ losses of their savings in case of investing in the crypto currency, paying particular attention to the fact that crypto-currencies are in essence a soap bubble.”
The memorandum also emphasizes that: “Virtual currencies and exchangers, through which customers can trade in this currency, are not regulated by EU law, that is, buyers can not rely on the law governing the provision of financial services. For example, in the event of the closure of a currency exchange, the theft of a crypto currency from a user’s wallet or a hacker attack with subsequent theft, the user can not expect to recover damages. ”
This warning applies to Bitcoin, Ethereum, Litecoin, and XRP. The Memorandum also mentions other crypto-currencies, which are realized without any information about their creators and the risks associated with their purchase.
According to the European Financial Supervision Agency, some of the risks are related to the difficulties of buying or selling a crypto-currency due to a delay in transactions. Users can purchase a certain part for one price, but because of network delays will receive a smaller amount at a higher price.
EU residents who still plan to invest in crypto-currencies, the European Financial Supervisory Authority recommends examining the characteristics of the proposed tokens and not investing an amount greater than that which it is not a pity to lose, and also to take all possible precautions to secure their own digital wallets. This memorandum was issued in response to the hype raised on the territory of the EU about the market of crypto-currencies, the accompanying risks and legislative regulation of this sphere.
In its press release last week, the ECMM noted that “the crypto-currency industry is one of the organization’s priorities for 2018”. The next day, representatives of the top leadership of France and Germany called on representatives of the G20 to discuss aspects of cooperation in the field of crypto-currency before the summit next month.
At the same time, the board member of the Central European Bank (ECB), Yves Mersch, expressed concern over the obvious signs of the “gold rush” in the crypto-currency markets, adding that “the legislative regulation of this industry will help to establish a certain order in this area.”