No crypto is safe: ESMA warns!

Volatility, regularization problem, rug pull, repletion hacks, crypto exchange collapse… So many reasons push investors to beware of cryptocurrencies. For’ESMA, these digital assets pose huge risks. A caveat is in order.

Cryptos, these risky assets

The series of scandals in the cryptocurrency market have favored the thirst for a legal regulatory framework among investors. Aware of the stakes represented by bitcoin, ether, dogecoin and other digital assets, the EU has set out to establish the regulation on crypto asset markets (MiCA).

Pending its entry into force in 2024, the European Securities and Markets Authority (ESMA) is undertaking a warning to‘attention investors.

The Blockafter getting wind of the consultation paper entitled ” Technical standards specifying certain requirements of crypto-asset markets (MiCA) “, provided details relating to this alert. According to this crypto media, the new proposals for CASPs, or crypto-asset service providers, cover:

• the rules relating to conflicts of interest ;
• as well as the method of handling customer complaints adopted by crypto companies.

Verena Ross, president of this European regulatory institution, insisted on the fact that cryptocurrencies are always risky.

” We are determined to ensure that entities involved in crypto-asset-related activities understand that the EU is not a forum-shopping place. We also want to remind consumers that even with the implementation of MiCA, there will be no safe crypto-assets“, she warned.

A position that has remained unchanged

ESMA is not at its first such warning. Because in March 2022, just before the collapse of Terra, the European regulator has already cast an anathema on cryptocurrencies.

Here is a small excerpt from the famous document:

” The European supervisory authorities (ABEC, ESMA, and EIOPA – AES) are warning retail investors that many crypto-assets are very risky and speculative. These are not suitable for most retail retail investors as an investment or as a means of payment or exchange. »

Of which risks does ESMA speak? The document in question Talk about :

• “extreme price variations”;
• “misleading information”;
• “lack of protection”;
• “complexity of the product”;
• “fraud and malicious activities”;
• “hacking, operational risks and security issues”;
• and “market manipulation, lack of price transparency and low liquidity”.

Either way, the EU’s intention to regulate cryptocurrencies seems laudable. Let’s hope, however, that his desire to strengthen the MiCA law does not turn into a barrier to adoption.