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EU regulators: Beware celebrity crypto ads

The EU’s three financial regulators published a checklist Thursday for hobby investors to study before buying cryptocurrencies that could leave them penniless.

The checklist came with the regulators’ latest warning against the high risks that come with snapping up speculative crypto assets, such as Bitcoin.

The regulators’ warning took aim at celebrities who have made money from posting crypto ads on social media. Many posts emphasize outlandish gains that can come with cryptocurrencies but make little or no mention of the downsides.

“Consumers face the very real possibility of losing all their invested money if they buy these assets,” said the statement from the European Banking Authority (EBA), the European Securities and Markets Authority (ESMA) and the European Insurance and Occupational Pension Authority (EIOPA). “Consumers should be particularly wary of promised fast or high returns, especially those that look too good to be true.”

Recent examples of celebrity endorsement can be found with U.S. reality TV star Kim Kardashian and boxing legend Floyd Mayweather, who are facing a lawsuit for promoting a cryptocurrency called EthereumMax last summer before its value crashed.

Scammers have also sought to cheat people who are trying to donate funds with cryptocurrencies to Ukraine after Russia invaded the country.

The regulators’ six-point checklist encouraged would-be crypto investors to research the products and services that they would like to put their money into and check to see if the associated companies are blacklisted. People should also consider how much money they’re prepared to lose in these investments.

EU legislators have yet to agree on consumer safeguards for the market in crypto assets. In the meantime, “consumers should be aware of the lack of recourse or protection available to them,” the warning said.

https://ift.tt/iTtJeEm March 17, 2022 at 03:31PM
Bjarke Smith-Meyer

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