Cryptocurrency investors in Europe are not yet protected under European Union cryptocurrency asset market rules, and it will take some time for the protections to take effect.
On Oct. 17, Europe’s securities regulator, the European Securities and Markets Authority (ESMA), issued a statement about the transition to the European crypto regulations known as the Markets in Crypto-Assets Regulation (MiCA).
The ESMA emphasized that MiCA-based crypto investor protections will not come into effect until at least December 2024, meaning that investors must be prepared to lose all the money they plan to invest in crypto. The authority added:
Even after December 2024, there is no guarantee investors will be fully protected by MiCA up to 2026. After MiCA becomes applicable to crypto asset service providers in late 2024, member states still have the option of granting crypto service providers an additional 18-month “transitional period” allowing them to operate without a license, which is also referred to as a “grandfathering clause.”
“This means that holders of crypto-assets and clients of crypto-asset service providers may not benefit from full rights and protections afforded to them under MiCA until as late as July 1, 2026,” the ESMA wrote. Most NCAs will have limited powers to supervise those who benefit from the transitional period, depending on local laws.
“In most cases, these powers are confined to those available under existing anti-money laundering regimes, which are far less comprehensive than MiCA,” the ESMA added.
Retail investors must be aware that there will be no such thing as a safe crypto asset even once MiCA is implemented, the authority stressed, adding:
The latest warnings from the ESMA come shortly after the regulator
Read more on cointelegraph.com