The Latest Trends, Risks and Vulnerabilities (TRV) Report of 2021 by the European Securities and Markets Authority (ESMA) shows that top European financial watchdogs are still very hostile to crypto.
Crypto sphere remains highly risky and unregulated
This document summarizes the positions of three European watchdogs: besides ESMA, it presents the views of the European Banking Authority (EBA) and the European Insurance and Occupational Pensions Authority (EIOPA).
The three bodies agreed that all previous warnings issued during the Crypto Winter of 2018-2019 are still relevant.
Therefore, the European Supervisory Authorities (the common name for the watchdogs that authored this report) reiterate their February 2018 joint warning:
Consumers must be alert to the high risks of buying and/or holding these instruments, including the possibility of losing all their money.
One more alarming aspect of the cryptocurrencies market is its unregulated status. Thus, holders of crypto riches should not expect legal and financial protection from EU regulators.
Regulators continue sending mixed signals
Meanwhile, in early Q4, 2020, the European Commission unveiled its proposal for regulatory frameworks for crypto markets. ESMA emphasizes that this proposal is not yet EU law, so no citizen can currently benefit from any protective measures prescribed by this document.
As a result, it is obvious that European regulators are not ready to greenlight crypto transactions in 2021. Neither are their American colleagues. As covered by U.Today previously, U.S. Treasury Secretary Janet Yellen claimed that Bitcoin (BTC) is an "extremely inefficient" system.
In addition, the U.S. CFTC sues digital payment mogul Ripple Inc. and its top officers for offering alleged illegal securities in the form of XRP crypto tokens.