Cryptocurrencies are “highly risky” assets in addition to are unsuitable as investments, three European Union (EU) regulators warned Monday.
The European Supervisory Authorities (ESAs) for securities, banking in addition to insurance in addition to pensions said in a joint statement which they were “concerned” about an increasing number of people buying virtual currencies without being aware of the risks involved.
“The ESAs warn consumers which VCs (virtual currencies) are highly risky in addition to unregulated products in addition to are unsuitable as investment, savings or retirement planning products,” the regulatory agencies said.
The group of watchdogs said which cryptocurrencies like bitcoin are volatile in addition to show “clear signs of a pricing bubble.” This particular added which people investing in them should be conscious of the high risk which they could “lose a large amount, or even all, of the money invested.”
As virtual currencies in addition to exchanges used to trade them are not regulated under EU law, the regulators warned which cryptocurrency investors are not protected inside the event of an exchange going out of business or a cyber-attack. Last month, cryptocurrency lending in addition to exchange firm Bitconnect said This particular was shutting down its platform after This particular received cease-in addition to-desist letters via securities divisions in Texas in addition to North Carolina.
The EU joins quite a few government authorities in raising concern over cryptocurrencies.
South Korea, for instance, introduced measures to tackle speculation inside the sector, banning the use of anonymous bank accounts in cryptocurrency trading. in addition to Indian Finance Minister Arun Jaitley said recently which his government will take measures to “eliminate” the use of cryptocurrencies in “illegitimate activities or as part of the payment system.”