Kevin Helms
An Austrian economics student, 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 of economics and cryptography.
EU regulator warns of crypto – question of whether many will survive – Bitcoin news
The chair of the European Securities and Markets Authority (ESMA), Verena Ross, says the cryptocurrency market crash should be a “cautious lesson” for investors. She noted that it is a “real question” as to whether many cryptocurrencies will survive.
ESMA leader in cryptocurrency risk and regulation
Verena Ross, chair of the European Securities and Markets Authority (ESMA), has warned investors to invest in cryptocurrencies after the cryptocurrency market lost 70% of its value, the Financial Times reported on Sunday.
She stressed that there were no prospects for a European rescue package for its own crypto investors, she said:
We warned earlier this year. . . about the serious risk retail investors took by investing in some of the cryptocurrencies.
ESMA will be responsible for licensing crypto-asset service providers recently agreed in Brussels as part of the Preliminary Agreement on the Markets in Crypto-Assets (MiCA) proposal. The agreement enters into force from mid-2023 and has an implementation period of 18 months.
The regulator will have the power to ban or restrict crypto platforms if they are not considered to protect investors properly, or threaten market integrity or financial stability.
Ross expressed concern that small investors are losing money, referring to the fact 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 and wiped out many investors. She meant:
I think there is a real question about many of these [crypto assets] will survive.
The chairman of the US Securities and Exchange Commission (SEC), Gary Gensler, warned in May after the collapse of LUNA and UST that many cryptocurrencies would fail.
The ESMA leader continued: “I hope some of these investors will see this and will at least take a cautious lesson in thinking about how much of their money they are investing in this type of asset.”
In March, ESMA and other leading European financial regulators warned consumers that “many cryptocurrencies 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 some control over the suppliers … We know that there is a lot of fraud and aggressive marketing.
Last month, the President of the European Central Bank (ECB), Christine Lagarde, warned that cryptocurrencies and decentralized finance (defi) could pose a financial stability risk. “This will be especially the case if the rapid growth of markets and services for cryptocurrencies continues … and the link 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 robust regulations for cryptocurrencies to G20 finance ministers and central bank governors in October.
What do you think of the comments of ESMA leader Verena Ross? Let us know in the comments section below.
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