Insights Blog

Regulatory Warnings

ESMA, the EBA and EIOPA (the ESAs) have issued a warning that crypto-assets are not a suitable investment, or payment method, for most retail consumers.

That warning was followed by a similar warning from the Central Bank of Ireland this afternoon, in which it commented that “…crypto assets are highly risky and speculative, and may not be suitable for retail customers… people need to be alert to the risks of misleading advertisements, particularly on social media, where influencers are being paid to advertise crypto assets”.

The Central Bank’s concerns mirror those expressed by the ESAs, in particular:

  • the risk to consumers of losing their entire investment
  • the risk of misleading advertisements (in particular via social media platforms and influencers)
  • promises of “fast or high returns, especially those that look too good to be true
  • the current lack of a consumer protection framework in respect of crypto-assets


The absence of a regulatory framework for crypto-assets continues to underpin the concerns of domestic and European regulators.  While virtual asset service providers (VASPs) operating in Ireland are now subject to Ireland’s AML/CFT framework and must register with the Central Bank (see our briefing here: AML Update: Crypto-Assets – VASPs must register with Central Bank), it will not be until MiCA (the European Commission’s proposed regulation on markets in crypto-assets) comes into force that we will see the start of a harmonised regulatory framework for crypto-assets within the EU.  MiCA is under consideration by the European Parliament this month, and it is a priority item for EU legislators (for further information on the proposal, read our briefing: Much Ado about Crypto – the Draft EU Crypto-Assets Regulation).  There is also continued global focus on protecting retail investors in crypto-assets, with IOSCO’s report and consultation on retail market conduct issues, published this week, expressing concerns “about the suitability for retail investors of crypto-assets and platforms, and possible related fraudulent platforms and scams.”

Priorities; Innovation Hub

We expect crypto-assets, and planning for authorisation applications under MiCA, to continue to figure prominently on the Central Bank’s list of priorities for the coming year (for our analysis of the Central Bank’s key focus areas, listen to our recent podcast: Financial Regulation Trends and Priorities for 2022).

The “novel risks” presented by unregulated crypto currencies were noted in the Consumer Protection Outlook Report 2022, and the Central Bank has also started to review its Innovation Hub in light of the rapidly changing financial landscape, in particular given the uptick in the number of enquiries relating to digital assets, and the impending MiCA framework.

We will continue to publish updates on developments in this rapidly evolving area.

“This warning comes in the context of growing consumer activity and interest in crypto-assets and the aggressive promotion of those assets and related products to the public, including through social media.”