EU financial regulators warn consumers on the risks of crypto-assets

The European Supervisory Authorities (EBA, ESMA and EIOPA – the ESAs) today warn consumers that many crypto-assets are highly risky and speculative. The ESAs set out key steps consumers can take to ensure they make informed decisions.

This warning comes in the context of growing consumer activity and interest in crypto-assets and the aggressive promotion of those assets and related products to the public, including through social media.

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:

• face the very real possibility of losing all their invested money if they buy these assets;
• 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 ESAs also warn consumers that they should be aware of the lack of recourse or protection available to them, as crypto-assets and related products and services typically fall outside existing protection under current EU financial services rules.

In relation to the current situation in Ukraine, and with a view to ensuring the proper implementation of the sanctions in place, the ESAs welcome the clarification by the Council of the European Union of the scope of the restrictive measures against Russian and Belarusian entities and individuals as regards crypto-assets.

Notes to the editors

• This warning is based on Article 9(3) of the founding Regulations of the ESAs and follows the joint-ESA warning issued February 2018 and statement in March 2021. 
• Consumers are reminded that the EC’s proposal for MiCA remains subject to the outcome of the co-legislative process and so consumers do not currently benefit from any of the safeguards foreseen in that proposal because it not yet EU law.
• The EBA is continuously monitoring crypto-asset developments and taking actions to facilitate knowledge-sharing between competent authorities with the objectives of promoting consistency in regulatory and supervisory approaches to, and understanding of, crypto-assets. The EBA acts where needed to address risk, notably in the context of the EBA’s warnings to consumers, and advice to the European Commission on the need for a common EU framework for crypto-asset activities both to leverage opportunities and mitigate risks arising from these activities.
• For selected EBA publications see:

EBA report on crypto-assets with advice for the European Commission (EC) (January 2019) which, together with advice from ESMA, culminated in the EC’s September 2020 proposal for a Regulation on Markets in Crypto-assets (MiCA) and the EC’s June 2021 proposals for the new AML package.

EBA Opinion (July 2014) and EBA Opinion (August 2016) on virtual currencies which, inter alia, recommended that supervisory authorities discourage credit institutions, payment institutions and electronic money institutions from buying, holding or selling so-called virtual currencies, and recommended bringing certain virtual currency actors into the scope of the EU’s anti-money laundering framework (changes that were brought about by Directive (EU) 2018/843 (AMLD5)).

EBA warning on virtual currencies to make consumers aware of the risks (December 2013).