EU Regulator: Cryptocurrencies Unsuitable as Consumer Payments

Several regulators in the European Union have warned against cryptocurrencies: these assets are unsuitable for most retail consumer payments.

EU regulator warns of risks of investing in cryptocurrencies

Three regulators in the European Union jointly issued a statement on Thursday warning of the risks of crypto assets.

A joint statement issued by the European Banking Authority (EBA), the European Insurance and Occupational Pensions Authority (EIOPA), and the European Securities and Markets Authority (ESMA) warned consumers that many cryptoassets are high-risk and speculative. They also said there are key steps consumers can take to ensure they make an informed decision.

The regulator warned: Consumers are increasingly trading and interested in cryptocurrencies, and social media and other means are actively promoting related assets and knowledge.

The regulator said:

These assets are not suitable for most retail consumers as an investment or means of payment.

If consumers buy these assets, they are likely to suffer significant losses on their invested capital, they said.

Regulators have also warned before: Be wary of misleading advertising, including through online tools such as social media, and don’t trust ads that promise quick or high returns, especially those that promise incredible returns.

They also said that consumers should be aware that services for crypto assets and related products are not covered by EU financial services rules, so in the event of a breach, recourse is difficult.

The European Commission's proposal on the crypto asset market is still in the legislative stage, and consumers cannot protect their rights through the bill that is still in the proposal, because it is not yet EU law.

Earlier this week, the European Parliament’s Economic and Monetary Affairs Committee voted against an amendment that would ban EU companies from using proof-of-work tokens.