EU Regulator Warns About Crypto — Questions Whether Many Will Survive

EU Regulator Warns About Crypto — Questions Whether Many Will Survive

European Securities and Markets Authority (ESMA) Chair Verena Ross says that the crypto market crash should be a “cautionary lesson” for investors. She noted that there is a “real question” about whether many crypto assets will survive. ESMA Chair on Crypto Risks and Regulation

Verena Ross, chair of the European Securities and Markets Authority (ESMA), has cautioned investors about cryptocurrency investing after the crypto market lost 70% of its value, the Financial Times reported Sunday.

Emphasizing that there was no prospect of a European bailout for out-of-pocket crypto investors, she said: We already warned earlier this year . . . about the serious risks retail investors were taking investing in some of the crypto assets.

ESMA will be responsible for licensing crypto asset service providers as recently agreed in Brussels as part of the provisional agreement on the Markets in Crypto-Assets (MiCA) proposal. The deal will enter into force from mid-2023 and has an 18-month implementation period.

The regulator will have the power to ban or restrict crypto platforms if they are seen to not properly protect investors, or threaten market integrity or financial stability.

Ross expressed concerns about small investors losing money, citing that the global crypto market has shrunk by more than 70% in the past year. In May, cryptocurrency terra (LUNA) and stablecoin terrausd (UST) collapsed, wiping out many investors. She opined: I think there is a real question about whether many of these [crypto assets] will survive.

The chairman of the U.S. Securities and Exchange Commission (SEC), Gary Gensler, warned in May after the collapse of LUNA and UST that many crypto tokens will fail.

The ESMA chair continued: “I hope that some of these investors will see this and will take a cautionary lesson at least to think about how much of their money they invest in these kinds of assets.”

In March, ESMA and other leading European financial regulators warned consumers that “many crypto assets are highly risky and speculative,” noting that investors “face the very real possibility of losing all their invested money if they buy these assets.”

Ross was further quoted as saying: We have all said that this is something that is not currently regulated, not something where there is any control over the providers … We know there is a lot of fraud and aggressive marketing going on.

Last month, the president of the European Central Bank (ECB), Christine Lagarde, warned that crypto assets and decentralized finance (defi) could pose financial stability risks. “This would be particularly the case if the rapid growth of crypto-asset markets and services continue … and the interconnectedness with both the traditional financial sector and the broader economy is intensified,” she stressed.

On Monday, the Financial Stability Board (FSB) announced that it will deliver a report outlining a robust regulatory framework for crypto assets to the G20 finance ministers and central bank governors in October. Tags in this story Crypto regulation, ESMA bitcoin, ESMA crypto, ESMA cryptocurrency, eu crypto regulation, Verena Ross, Verena Ross bitcoin, Verena Ross crypto, Verena Ross cryptocurrency

What do you think about the comments by ESMA Chair Verena Ross? Let us know in the comments section below. Kevin Helms

A student of Austrian Economics, Kevin found Bitcoin in 2011 and has been an evangelist ever since. His interests lie in Bitcoin security, open-source systems, network effects and the intersection between economics and cryptography. US Bankruptcy Judge Freezes Crypto Hedge Fund Three Arrows Capital"s Assets REGULATION | 19 hours ago G20 Watchdog Announces "Robust" Global Crypto Regulation Coming in October REGULATION | 2 days ago

Image Credits: Shutterstock, Pixabay, Wiki Commons Previous articleAdshares Establishes Premium Partnership With Sandbox Next articleState-Owned Swiss Bank Postfinance to Offer Clients Direct Access to Crypto Market Disclaimer: This article is for informational purposes only. It is not a direct offer or solicitation of an offer to buy or sell, or a recommendation or endorsement of any products, services, or companies. Bitcoin.com does not provide investment, tax, legal, or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article. Read disclaimerShow comments More Popular NewsIn Case You Missed ItSEC Risks Violating Admin Procedure Act by Rejecting Spot Bitcoin ETFs, Says Grayscale

Grayscale Investments" CEO explains that the U.S. Securities and Exchange Commission (SEC) could potentially violate the Administrative Procedure Act by not approving a spot bitcoin exchange-traded fund (ETF). SEC Approving Spot Bitcoin ETF Is "a Matter of When and Not ... read more.Fed"s Bullard Wants to Raise Bank Rate to 3.5% by Year"s End, Hints at 75 Basis Point Rate Hike Survey: Adoption in Argentina Grows, With 12 out of 100 Adults Having Invested in Crypto Digital Ruble ‘Much Needed,’ Russia’s Central Bank Says, Won’t Delay Testing Iran to Increase Penalties for Unauthorized Cryptocurrency Mining