The European Supervisory Authorities (ESAs) has reiterated on 17 March 2021 the risk in virtual currencies and crypto investments, which the BaFin has shared. The European Banking Authority (EBA), the European Supervisory Authority for Insurance and Company Pension Plans (EIOPA), and the European Securities and Markets Authority (ESMA) are taking the current attraction to crypto values as an opportunity to remind small investors of a possible risk of total loss.
BaFin had already warned in January 2021 of the dangers associated with the crypto asset rave. Currently, cryptocurrencies are largely unregulated in the European Union. The legislative proposal for a regulation on markets for cryptocurrencies is not yet incorporated in EU law. In Germany, companies that want to operate the crypto custody business require a permit from BaFin. In addition, companies need permission from BaFin for activities that involve banking or financial services and that relate to cryptocurrencies. However, there are no protections against losses associated with this.
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