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.
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.
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 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.
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