EU Supervisory Authorities warn consumers of risks and limited protection for certain crypto-assets and providers
The European Supervisory Authorities (EBA, EIOPA and ESMA – the ESAs) today issued a warning to consumers reminding that crypto-assets can be risky and that legal protection, if any, may be limited depending on which crypto-assets they invest in. This warning is accompanied by a factsheet explaining what the new EU regulation on Markets in Crypto-Assets (MiCA) means for consumers. The ESAs recommend concrete steps consumers can take to make informed decisions before investing in crypto-assets such as checking if the provider is authorised in the EU.
Since December 2024 MiCA applies to certain types of crypto-assets and establishes a consistent supervisory regime at both national and European level for issuers and providers of crypto-assets services across the EU.
While innovative financial products, including crypto-assets, may enhance the efficiency, resilience, and competitiveness of the EU’s financial system, consumers should be mindful that not all crypto-assets are the same. They should also be warned that their consumer protection (if any) might be limited depending on the types of crypto-assets and crypto-asset services they are using (e.g. lack of access to comprehensive information or a transparent and uniform claims handling procedure).
Consumers are recommended to:
- learn about the product or service and evaluate the risk before investing,
- check the provider of crypto-asset services is authorised in the EU and,
- make sure any wallets used to store their crypto-assets are sufficiently secured.
Those steps are particularly important at a time when consumers’ interest in such products and services is on the rise, in part due to aggressive promotion on social media by finfluencers.
The Joint ESAs factsheet – also available in all EU languages – provides an overview of what crypto assets are, which ones are regulated under MiCA and which ones are not, and the providers consumers may encounter.
