The European Supervisory Authorities (ESMA, EBA and EIOPA) (the ESAs) have issued a warning to consumers on the high risks of buying and/or holding so-called virtual currencies (VCs). The warning is based on Article 9(3) of the ESAs’ founding Regulations and follows the publication of statements by ESMA on initial coin offerings.
The warning sets out at a high level the risks associated with VCs and then briefly discusses what consumers can do to protect themselves from the risks. The warning states that if a consumer decides to buy VCs or financial products giving direct exposure to VCs, they should fully understand the VC’s characteristics and the risks being taken. Consumers should not invest money they cannot afford to lose. Consumers should also make sure that they maintain adequate and up-to-date security precautions on the devices and hardware they use for accessing VCs or for buying, storing or transferring VCs.
View ESAs warn consumers of risks in buying virtual currencies, 12 February 2018