(Duplicated) EU Regulators Warn Risks of Dabbling in Crypto

The European Union's securities, banking and insurance watchdogs sent out a warning in a joint statement on Thursday saying that crypto-asset buyers are at risk of losing all their money and becoming victims of scams, Reuters reported.

In a statement, the three EU authorities said that "consumers face the very real possibility of losing all their invested money if they buy these assets."

Although the EU has not banned crypto-assets, the warning marks a deeper concern for consumers as under existing EU financial services law, they have no protection or recourse to compensation from potential fraud.

Regulators have shown worry as there has been an increase in consumers buying 17,000 different crypto-assets, such as bitcoin and ether which forms 60% of the crypto market, without entirely being aware of the risks involved.

"Consumers should be alert to the risks of misleading advertisements, including via social media and influencers. Consumers should be particularly wary of promised fast or high returns, especially those that look too good to be true," the statement said.

The three EU authorities also noted that consumers should have an understanding of the huge amount of energy consumption for producing some crypto-assets and the negative impact it has on the environment.

In another latest development of the sector in the EU, the bloc's parliament committee rejected a proposal to limit proof-of-work mechanisms.

Blockchain.News reported that the European Parliament’s Economic and Monetary Affairs Committee voted Monday, a move that quashed a ban on popular cryptocurrency Bitcoin across the EU. 

The committee voted against the ban on Proof-of-Work mechanisms underlying major cryptocurrencies like Bitcoin and Ethereum, the report added.