The European Supervisory Authorities (EBA, ESMA and EIOPA – ESAs) issued a stern warning about cryptocurrencies, warning investors that they could lose all assets.
In the warning, it was stated that those considering investing in crypto should ask themselves whether they can take high risks and whether they understand the characteristics of certain crypto assets.
Authorities are concerned about the lack of education regarding the risks associated with the crypto industry.
Regulators are particularly concerned about the misleading crypto ads that routinely pop up on social media. It was emphasized that crypto projects often make deals with influencers that make the problem worse.
Regulators urge investors to be “particularly wary” of excessively high returns.
Authorities also warn investors against hacking attacks, operational risks and security problems.
High Energy Consumption
Regulators also addressed crypto money projects that use proof-of-work algorithms such as Bitcoin and Ethereum. It was stated that such projects use high energy and therefore it is necessary to have an idea about their environmental effects.
These regulators’ warnings came just after projects using the proof-of-work algorithm escaped a de facto ban
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