The European Union, which frequently warns about Bitcoin (BTC) and cryptocurrencies as risky, has issued a new warning.
Europe’s securities regulator has warned cryptocurrency companies not to mislead their customers, according to a Reuters report.
The European Securities and Markets Authority (ESMA) has warned crypto platforms not to mislead customers about the regulatory status of their products.
ESMA said some cryptoasset service providers (CASPs) offer both regulated and unregulated products, but are putting retail investors at risk by failing to clearly distinguish between their products. ESMA emphasized that firms must clearly distinguish between products that fall within the scope of MiCA and those that do not.
On this point, ESMA said that having crypto asset service providers (CASPs) offer both regulated and unregulated products through the same platform “causes risks for investors” because customers may not be aware of which products are under MiCA protection.
“Some CASPs may use their regulated status under MiCA as a marketing argument, leading to confusion between regulated and unregulated products and services.”
Finally, ESMA also said that cryptocurrency companies should not use their regulated products as a “promotional tool” or imply that their unregulated products are within the scope of the MICA.
*This is not investment advice.
