EU Markets Regulator Warns Investors That Some Crypto Currencies Are Highly Risky
In order to provide a safe digital currency market to investors, GOI Proposed Crypto Currencies and Regulation of Official Digital Currency Bill 2021
Prominent markets Regulator European Securities and Markets Authority (ESMA) on Wednesday said, “investors must be careful while investing in cryptocurrencies as some crypto assets are highly risky and there is possibility of them losing all their money”.
As per the Trends, Risks and Vulnerability (TRV) 2021 report, the Paris-based regulator said there is a high risk involved in investing in private cryptocurrencies. Some cryptocurrencies are not regulated by any authority that causes high risk for investors.
“Some cryptocurrencies or non-regulated cryptocurrencies are highly risked consuming and speculative, investors must be alert to the high risks of buying and holding these instruments, including the possibility of losing all their money.”
India has already declared to ban all the private cryptocurrencies after facing numbers of frauds involve in digital currency markets. To ensure the safety of digital investors, the Indian Government proposed Cryptocurrencies and Regulation of Official Digital Currency Bill 2021 that is most probably to be presented in the current parliament session. However, FM Nirmala Sitharaman has recently said that “while the RBI may take a call on official cryptocurrency but from our side, we are very clear that we are not shutting off all options.”
The regulator noted that while crypto-assets come in many forms but the majority of them remain unregulated in the EU. This meant that investors buying crypto or holding them do not benefit from the guarantees and safeguards that come with regulated financial services globally. In September 2020, the European Commission has presented a legislative proposal for a regulation on markets in crypto-assets.
TRV 2021 report further added that consumers are reminded that the proposal remains subject to the outcome of the co-legislative process and so consumers do not currently benefit from any of the safeguards foreseen in that proposal because it is not yet EU law.
Many financial experts said that there are many digital currencies that are still in a market and unregulated which are highly risky too. They also suggested that if a person is new in the cryptocurrency market, should not invest in the market.
While in India, none of the digital currency players are regulated but since the authorities are extremely focused on the usage of cryptocurrencies.
Click here for more Business News