As per the prominent financial watchdogs of the EU, customers have a risk of losing their entire funds on investing them in crypto. The European Union-based insurance, banking, as well as securities regulators have pronounced alert suggesting investors not to invest in cryptocurrencies.
EU regulators make the investors aware of the crypto-investment hazards
The regulators have released a caution regarding hazards associated with making crypto investments. Three EU-based watchdogs named European Insurance and Occupational Pensions Authority, European Securities and Markets Authority, as well as the European Banking Authority released a mutual press statement on Thursday to warn customers regarding the hazards linked with the growing crypto industry.
The regulators mentioned that the customers undergo the very genuine chance of being deprived of their funds on purchasing the respective assets. This caution was advocated on the behalf of the elevating investor interest across the crypto space as well as the forceful crypto and the related products’ promotion through influencers and social media. Crypto assets are extremely hazardous, speculative as well as have no suitability to be utilized for investments by the customers or as a method of exchange or payment.
The warning takes account of a checklist including the most significant hazards that the watchdogs think to be examined by the investors in advance of making crypto investments. Market manipulation, hacks, fraud, and a deficiency in customer protection were referred to by the watchdogs as the peak concerns noted in the statement. The warning from the watchdogs is witnessed as the latest highs are being seen in the frequency of misleading crypto ads, crypto theft, as well as scams across the market.
Growing scams and crypto
Chainalysis – a blockchain analytics company – published a unique report over crypto crimes, revealing that a record value of nearly $14B worth in crypto has been swindeled by the scammers during the previous year. Instances of influencer and celebrity-promoted pump-and-dump projects are in abundance at present.
During this January, for example, an investor group submitted a class-action legal case against Kim Kardashian (a TV star) as well as Floyd Mayweather (an international boxing champion) over their misleading or wrong statements to promote the EthereumMax project, which had a plunge in value by 97.8%. Several crypto-world-related influencers have been detected while performing paid promotions for unauthorized projects and as a result, disappeared with leaving no trace or executed a rug pulling over the investors thereof.