European Union’s securities, banking and insurance watchdogs have warned that patrons and consumers of crypto risk losing all their money invested in crypto assets.

According to the EU authorities, consumers of these scams or schemes will have no compensation.

“Consumers face the very real possibility of losing all their invested money if they buy these assets,” the three EU authorities said in a statement.

It marks a ratcheting up of direct warnings to consumers about cryptoassets by EU authorities, spelling out that consumers have no protections under existing EU financial services law.

Regulators are increasingly worried that more consumers are buying 17,000 different cryptoassets, including bitcoin and ether, which account for 60% of the market, without being fully aware of the risks, the regulators said.

“Consumers should be alert to the risks of misleading advertisements, including via social media and influencers. Consumers should be particularly wary of promised fast or high returns, especially those that look too good to be true,” the statement said.

Consumers should also be aware that energy consumption for producing some cryptoassets is high and the environmental impact this has, the statement said.

In Ghana, crypto currencies such as Bitcoin were not regulated under any laws and are therefore not backed by any guarantees or safeguards. 

“BoG advises the general public to exercise caution in respect of crypto currency transactions,” a BoG statement warned.

The BoG has thus directed all licensed institutions including banks, specialised deposit-taking institutions, dedicated electronic money issuers and payment service providers to refrain from facilitating crypto currency transactions via their platforms or agent outlets.

It urged the general public not to patronise Freedom Coin, etc, and visit the Financial Stability Department BoG at the 7th Floor Cedi House 1 Liberia Road Accra, Ghana, to enquire about companies licensed by the BoG to operate banking and financial businesses