EU regulator urges crypto firms to disclose regulatory status of products
The European Union’s financial watchdog has issued a statement reminding investment firms to make sure their clients are aware of the regulatory status of the products they are offering.
In an announcement, the European Securities and Markets Authority (ESMA) highlighted crypto assets and reminded companies that while regulation is on the way, crypto will remain unregulated in most jurisdictions. The ESMA stated:
The ESMA expressed concerns over unregulated products and services offerings. According to the regulator, these carry prudential and investor protection risks. In addition, the financial watchdog believes that it’s possible for clients to be “misled as to the level of protection they get.”
⚠️ #ESMA warns investors of risks that arise when investment firms offer both regulated and unregulated products and/or services. remind firms of the behaviours they are expected to adopt firms may not benefit from regulatory protectionshttps://t.co/TT3CQFgeKs pic.twitter.com/5CPrrbbvid
To mitigate such risks, the ESMA recommended that investment firms take measures to ensure their clients know the regulatory status of the products they are investing in. The regulator also advised firms to clearly inform clients when regulatory protections do not apply to their products or services.
In addition, the ESMA urged investment firms to consider the impact of unregulated activities on their business when devising risk management policies and systems.
Related: EU finance ministers approve MiCA crypto regulation
Meanwhile, crypto firms are starting to establish a presence in Ireland to expand their businesses in Europe. On May 25, crypto firm Gemini chose Ireland as its European base. Gemini founder Cameron Winklevoss confirmed
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