CySEC President Warns of Risks in Crypto Investing and Endorses MiCA

CySEC President Warns of Risks in Crypto Investing and Endorses MiCA

The growing popularity of cryptocurrencies and the risks associated with these investments have alarmed the Cyprus Securities and Exchange Commission (CySEC). The head of the Cyprus regulator, Dr. George Theocarides, on Tuesday warned cryptocurrency investors of “liquidity risks, volatility risks, cyber risks, [and] Forgery.”

“Investor interest in crypto assets around the world is growing and their inherent risks, combined with a lack of appropriate information and online hype, can lead to financial losses for investors,” Dr. Wrote.

He stressed the need to educate investors about the various risks involved in investing in crypto assets.

“The rapid growth of crypto-asset markets and the ecosystems that underpin them present new challenges and risks for all regulators around the world. While technological innovation offers many promising possibilities – such as improving access to financial services – the immaturity of the ecosystem and the assets themselves, could potentially lead It prevents the development of confidence in this sector,” added Dr. Theocarides.

Paving the organizational path

CySEC is one of the preferred regulators for financial services firms targeting the largest traders in the European Union. Favorable licensing requirements compared to their European counterparts allow brokers to make a Mediterranean island their base.

The Cypriot regulator, which oversees several forex and CFD brokers, has also lured crypto companies by issuing industry-specific registration directives in mid-2021. The move has also worked as major crypto firms such as Crypto.com and FTX head to the island.

Now, Dr. Theocharides is concerned about the many risks in the cryptocurrency industry. It has also upset investors with aggressive marketing campaigns for several crypto projects that even receive paid endorsements from celebrities.

“Many crypto assets have no tangible value – unlike traditional securities, such as stocks or bonds, which results in their value and price being exclusively dependent on supply and demand which in most crypto assets can be highly speculative. This can lead to high volatility,” he said. In price, investors incur significant losses.

He also highlighted the “urgent need” for crypto regulations and outlined the benefits of the proposed European Union Regulation on Markets in Crypto Assets (MiCA), which aims to bring in crypto assets, crypto asset issuers and crypto asset service providers. under a common regulatory framework.

“CySEC is determined to play an important role in improving investor education on the risks of investing in crypto assets, and will remain vigilant about the growth of the sector, in anticipation of the passage of MiCA that will allow its comprehensive oversight,” he said. CySEC President.

The growing popularity of cryptocurrencies and the risks associated with these investments have alarmed the Cyprus Securities and Exchange Commission (CySEC). The head of the Cyprus regulator, Dr. George Theocarides, on Tuesday warned cryptocurrency investors of “liquidity risks, volatility risks, cyber risks, [and] Forgery.”

“Investor interest in crypto assets around the world is growing and their inherent risks, combined with a lack of appropriate information and online hype, can lead to financial losses for investors,” Dr. Wrote.

He stressed the need to educate investors about the various risks involved in investing in crypto assets.

“The rapid growth of crypto-asset markets and the ecosystems that underpin them present new challenges and risks for all regulators around the world. While technological innovation offers many promising possibilities – such as improving access to financial services – the immaturity of the ecosystem and the assets themselves, could potentially lead It prevents the development of confidence in this sector,” added Dr. Theocarides.

Paving the organizational path

CySEC is one of the preferred regulators for financial services firms targeting the largest traders in the European Union. Favorable licensing requirements compared to their European counterparts allow brokers to make a Mediterranean island their base.

The Cypriot regulator, which oversees several forex and CFD brokers, has also lured crypto companies by issuing industry-specific registration directives in mid-2021. The move has also worked as major crypto firms such as Crypto.com and FTX head to the island.

Now, Dr. Theocharides is concerned about the many risks in the cryptocurrency industry. It has also upset investors with aggressive marketing campaigns for several crypto projects that even receive paid endorsements from celebrities.

“Many crypto assets have no tangible value – unlike traditional securities, such as stocks or bonds, which results in their value and price being exclusively dependent on supply and demand which in most crypto assets can be highly speculative. This can lead to high volatility,” he said. In price, investors incur significant losses.

He also highlighted the “urgent need” for crypto regulations and outlined the benefits of the proposed European Union Regulation on Markets in Crypto Assets (MiCA), which aims to bring in crypto assets, crypto asset issuers and crypto asset service providers. under a common regulatory framework.

“CySEC is determined to play an important role in improving investor education on the risks of investing in crypto assets, and will remain vigilant about the growth of the sector, in anticipation of the passage of MiCA that will allow its comprehensive oversight,” he said. CySEC President.

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