CySEC chief warns against crypto investment risks, supports MiCA
The growing popularity of cryptocurrencies and the associated risks of such investments have alarmed the Cyprus Securities and Exchange Commission (CySEC). The Cypriot regulator’s chairman, Dr. George Theocharides, warned crypto investors on Tuesday against “liquidity risk, volatility risk, cyber risk, [and] fraud.”
“Investor interest in crypto-assets worldwide is on the rise, and their inherent risks, together with a lack of proper information and online hype, can lead to material losses for investors,” Dr. Theocharides wrote.
He emphasized the need for educating investors about the various risks involved in investing in crypto assets.
“The rapid growth of crypto-asset markets and the ecosystems that support them pose new challenges and risks to all regulatory bodies worldwide. While technological innovation offers many promising opportunities – such as improved access to financial services – the immaturity of the ecosystem and the assets themselves even inhibit the cultivation of trust in the sector,” Dr. Theocharides added.
Asphalting of the regulation road
CySEC is one of the favorite regulators for financial services companies targeting the larger EU traders. Its favorable licensing requirements compared to other European counterparts allow brokers to make the Mediterranean island their base.
The Cypriot regulator, which oversees several forex and CFD brokers, also lured crypto companies by issuing industry-specific registration directives in mid-2021. The move also succeeded as major crypto firms such as Crypto.com and FTX headed to the island.
Now, Dr. Theocharides is concerned about more risks in the crypto industry. He also spooked investors with aggressive marketing campaigns for several crypto projects that even receive paid celebrity endorsements.
“Many crypto-assets have no material value – unlike traditional securities, such as shares or bonds, resulting in their value and price solely depending on supply and demand, which in most crypto-assets can be highly speculative. This can lead to high volatility in prices and investors suffering heavy losses, he said.
He also highlighted the “urgent need” for crypto-regulations and counted the benefits of the proposed EU Regulation on Markets in Crypto-assets (MiCA), which aims to bring crypto-assets, crypto-asset issuers and crypto-asset service providers together. under a common set of regulations.
“CySEC is determined to play an important role in improving investor education about the risks of investing in cryptoassets and it will remain vigilant for the growth of the sector, pending the adoption of MiCA which will allow its comprehensive supervision,” the CySEC head said .
The growing popularity of cryptocurrencies and the associated risks of such investments have alarmed the Cyprus Securities and Exchange Commission (CySEC). The Cypriot regulator’s chairman, Dr. George Theocharides, warned crypto investors on Tuesday against “liquidity risk, volatility risk, cyber risk, [and] fraud.”
“Investor interest in crypto-assets worldwide is on the rise, and their inherent risks, together with a lack of proper information and online hype, can lead to material losses for investors,” Dr. Theocharides wrote.
He emphasized the need for educating investors about the various risks involved in investing in crypto assets.
“The rapid growth of crypto-asset markets and the ecosystems that support them pose new challenges and risks to all regulatory bodies worldwide. While technological innovation offers many promising opportunities – such as improved access to financial services – the immaturity of the ecosystem and the assets themselves even inhibit the cultivation of trust in the sector,” Dr. Theocharides added.
Asphalting of the regulation road
CySEC is one of the favorite regulators for financial services companies targeting the larger EU traders. Its favorable licensing requirements compared to other European counterparts allow brokers to make the Mediterranean island their base.
The Cypriot regulator, which oversees several forex and CFD brokers, also lured crypto companies by issuing industry-specific registration directives in mid-2021. The move also succeeded as major crypto firms such as Crypto.com and FTX headed to the island.
Now, Dr. Theocharides is concerned about more risks in the crypto industry. He also spooked investors with aggressive marketing campaigns for several crypto projects that even receive paid celebrity endorsements.
“Many crypto-assets have no material value – unlike traditional securities, such as shares or bonds, resulting in their value and price solely depending on supply and demand, which in most crypto-assets can be highly speculative. This can lead to high volatility in prices and investors suffering heavy losses, he said.
He also highlighted the “urgent need” for crypto regulations and counted the benefits of the proposed EU Regulation on Markets in Crypto Assets (MiCA), which aims to bring crypto assets, crypto asset issuers and crypto asset service providers together. under a common set of regulations.
“CySEC is determined to play an important role in improving investor education on the risks of investing in cryptoassets, and it will remain vigilant for the growth of the sector, pending the adoption of MiCA which will allow its comprehensive oversight,” CySEC said- the manager.
