EU urges users not to rush to buy cryptocurrencies

The European Securities and Markets Authority (ESMA) has published an official warning on the risks of investing in cryptocurrencies, which remain relevant until the entry into force of the EU Cryptocurrency Regulation (MiCA).

ESMA states that investment firms can provide both regulated and unregulated products and services related to digital assets. Moreover, the products and services are presented as an alternative to financial instruments, but go beyond the current regulation of financial services in the European Union.

ESMA has asked companies offering cryptocurrency products and services to inform users about the risks involved. Companies are obliged to inform their customers about the regulatory status of goods and services by disclosing information about the risks. In addition, firms should not mention their own organizational and legal status in advertising.

As a reminder, last year, ESMA proposed to completely ban cryptocurrency mining based on the Proof-of-Work (PoW) consensus algorithm. The ban is necessary in order to motivate miners to mine cryptocurrencies in a more environmentally friendly way, ESMA representatives explained.