In a joint statement, securities, banking and insurance watchdogs of the European Union said, consumers risk losing all their money invested in cryptoassets.
“Consumers face the very real possibility of losing all their invested money if they buy these assets,” said the three EU authorities in a statement.
The development marks a heightening in direct warnings to consumers on risks surrounding cryptoassets by EU authorities since under existing EU financial services law consumers have no protections or recourse to compensation on loss from cryptoassets.
Regulators are worried that consumers are buying 17,000 different cryptoassets, including bitcoin and ether, which account for 60% of the market, without being fully aware of the risks, the regulators said.
“Consumers should be alert to the risks of misleading advertisements, including via social media and influencers. Consumers should be particularly wary of promised fast or high returns, especially those that look too good to be true,” reads the joint statement.