IBSI Announces Subscription Flexibility !

IBS Journal now starts at £9 per issue, and custom Reports at 40% off

The European Securities and Markets Authority (ESMA), the European Banking Authority (EBA) and the European Insurance and Occupational Pensions Authority (EIOPA) are warning consumers on the high risks of trading any cryptocurrency.

Similarly, in Saudi Arabia, the Capital Market Authority (CMA) is issuing similar advice, highlighting the difficulty of protecting investors as it being out of the Kingdom’s scope of control.

Virtual currencies’ value is currently neither issued nor guaranteed by a central bank or public authority, so it does not have the legal status of currency or money. They are highly risky, generally not backed by any tangible assets and unregulated under EU law, and do not, therefore, offer any legal protection to consumers.

These institutions are concerned about the increasing number of consumers investing without being aware of its risks.

Read more: Spanish central bank warns about cryptocurrency as government seeks regulation

For the CMA, it points out that while some websites come with the spread invitations and promotions to cryptos, these tend to sign fake contracts and request to transfer funds to unknown parties, leading to scams.

According to these institutions, investing in cryptocurrencies incurs a series of risks: extreme volatility and bubble risk, absence of protection, lack of exit options, lack of price transparency, misleading information; unsuitability of cryptos for most purposes, including investment or retirement planning; and operational disruptions.

by Henry Vilar
Henry is Junior Reporter at IBS Intelligence, follow him on Twitter or contact him at: henryv@ibsintelligence.com