European Financial Regulator Warns Investors On Cryptocurrency Volatility

On Monday, the European Securities and Markets Authority (ESMA) released a statement on its precieved risks associated with cryptocurrency, stressing the instability of this type of currency, illustrated in recent days by the iconic bitcoin.

The markets watchdog stressed that startups or open-source projects involved in “Initial coin offerings” (ICO) are at risk of conducting regulated investment activities without observing applicable EU legislation, including its prospectus directive, the fourth anti-money laundering directive and other laws.

“ESMA has seen rapid growth of ICOs both in the world and in Europe, and fears that investors are not aware of the high risks they are taking,” the regulator said in a statement.

The ESMA warns European investors that they risk being deprived of recourse in the event of disputes because many of the ICOs, which operate via the fully decentralized “blockchain” technology, “do not fall within the scope of the laws and regulations. European regulations “.

Above all, the regulator reminds reminds investors that virtual currency remain “extremely volatile”.

The warning of ESMA was published when bitcoin, the most emblematic virtual currency, saw a sharp drop this past week.

On Monday, it fell to $5,605, a drop of nearly 30% since a record high on November 8. Around 10H20 GMT, it was up to $ 6,425.

Bitcoin suffers in particular from the competition of a rival, the “bitcoin cash”, created this summer at the initiative of a minority of the community of its users.

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About the Author: Dara Steenburgh

Dara has been a reporter at with Crypoto Post Gazette since Nov. 2016. She enjoys running, practicing minimalism, reading whatever Oprah recommends, and trying out the next best skincare item that probably won't work. Dara is a graduate of Wesleyan University in Connecticut where she studied journalism, Arabic and international affairs. To contact Dara, just click here

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