Steven Maijoor, chair of the European Securities and Markets Authority (ESMA), has warned cryptocurrency investors they could “lose all of your investments”.
Speaking to TV network CNBC about the Asian market, he said: “This is a very unregulated space. You don't have the regular protection a prospectus so you should realise as you go into these markets as a retail consumer you can lose all of your investments.”
French attack on Bitcoin
His comments follow France's economy minster Bruno le Maire saying yesterday that he wanted to crack down on cryptocurrencies.
In a wide-ranging speech he said: “We want a stable economy: we reject the risks of speculation and the possible financial diversions linked to bitcoin.
G20 asked to regulate cryptocurrencies
The influential French minister wants international agreement on regulating cryptocurrencies. He said: “I asked the Argentine G20 presidency to take up this issue and I have just given Jean-Pierre Landau, former deputy governor of the Banque de France, a mission on cryptocurrencies.
“This mission will provide me with guidance on the evolution of regulations to better control development and prevent their use for tax evasion, money laundering or financing of criminal activities or terrorism.”
Watch ICOs carefully
Maijoor told CMBC: “On the whole area of cryptocurrency we need to watch them very carefully.
“As the European Securities and Markets Authority, we warned in November about so-called ICOs (Initial Coin Offerings) because ICOs, in principle, can give you a service in return for the coin that you buy or you can get a share in the revenues, but this is a very unregulated space.
“You don't have the regular protection a prospectus so you should realise as you go into these markets as a retail consumer you can lose all of your investments.
“Our role here is on the one had to warn but also to think how can we accommodate these new developments.”
Trading in all the major cryptocurrencies has seen prices fall significantly, with falls around 20%, but many are starting to bounce back.
The ESME has not responded for capital.com’s requests for further information.