The European Securities and Markets Authority (ESMA) has issued a new warning to cryptocurrency companies regarding deceptive practices related to the regulatory status of their products.
Warning from ESMA Regarding Crypto Platforms
ESMA has urged cryptocurrency companies not to mislead customers regarding the regulation of their products. This warning is part of a broader strategy by the European Union aimed at protecting investors in financial markets.
Need to Distinguish between Regulated and Unregulated Products
According to ESMA, some crypto asset service providers (CASPs) offer both regulated and unregulated products without clearly distinguishing between them. This creates risks for retail investors who may not be aware of which products are covered by MiCA. ESMA emphasizes the need for firms to clearly indicate which products fall under regulatory oversight.
ESMA's Conclusions for Crypto Companies
ESMA also noted that cryptocurrency companies should not use their regulated products as a 'promotional tool' or imply that their unregulated products are under the scope of MiCA. 'Some CASPs may use their regulated status as a marketing argument, leading to confusion between regulated and unregulated products and services,' the report states.
Thus, ESMA continues to work towards ensuring a safer environment for investors in cryptocurrency markets, strongly urging companies to adhere to transparency regulations.
