EUROPEAN REGULATORS REMIND CRYPTO INVESTORS THEY COULD ‘LOSE ALL THEIR MONEY’

Consumers should be prepared to lose all their money if they invest in cryptocurrencies, a group of Europes regulators has warned on Thursday.

As the popularity of cryptocurrencies grows, the European Unions securities, banking and insurance watchdogs urged investors to understand what they were investing in and the financial risks involved.

In their warning, the ESAs highlight that these assets are not suited for most retail consumers as an investment or as a means of payment or exchange. As consumers, they face the very real possibility of “losing all their invested money if they buy these assets,” it said.

Europeans were also warned not to fall for scams in which digital crooks use fake celebrity endorsements to promote investments. A greater use of social media websites has been identified as one of the reasons for this, with dummies in particular were more likely to be reliant on Facebook or twitter for investment tips.

The ESAs said some crypto investment firms may be overstating potential payouts, or understating the risks. As such, consumers should be alert to “the risks of misleading advertisements, including via social media and influencers; and should be particularly wary of promised fast or high returns, especially those that look too good to be true.”

The European supervisory authorities also cited other concerns including price volatility, the complexity of products offered and the lack of consumer protection regulation around many of crypto assets.