Can you afford to lose all the money you invest?
If that sounds like a tough question, that’s probably because it is.
‘Be Alert to the Risks’
And it is a question that the European Union’s European Union’s securities, banking and insurance regulators are advising consumers to ask themselves before they get involved in potentially shady cryptocurrency investments.
Last year, scam artists ripped off over $7.7 billion worth of cryptocurrency, the blockchain analysis firm Chainalysis said, up 81% from the previous year.
“Consumers face the very real possibility of losing all their invested money if they buy these assets,” the EU agencies said in a statement. “Consumers should be alert to the risks of misleading advertisements, including via social media and influencers.”
They should be particularly wary of promised fast or high returns, especially those that look too good to be true.
And since crypto-assets and related products and services typically fall outside existing protection under current EU financial services rule, consumers should be aware of the lack of recourse or protection available to them.
Extreme Price Movements
There are more than 17,000 different crypto-assets, the EU regulators said, including bitcoin and ether, which account for 60% of the market.
Many crypto-assets are subject to sudden and extreme price movements and are speculative, because their price often relies solely on consumer demand.
You may lose a large amount or even all of the money you…
