EU Supervisory Authorities Warn Consumers of Risks & Limited Protections for Certain Crypto-Assets & Providers

The European Supervisory Authorities (EBA, EIOPA and ESMA – collectively the ESAs) have issued a joint warning to consumers about the significant risks associated with investing in crypto-assets. The regulators stressed that legal protection under the EU’s new Markets in Crypto-Assets (MiCA) Regulation remains limited, depending on the type of crypto-asset and the authorisation status of the provider.

The warning is accompanied by a factsheet designed to help consumers understand what MiCA means for them, including which crypto-assets and service providers fall under the new regime. The ESAs urged individuals to check whether a provider is authorised in the EU before investing or engaging in crypto-asset activities.

In force since December 2024, the MiCA Regulation establishes a harmonised supervisory framework for issuers and providers of crypto-asset services across the EU. It aims to enhance market integrity, transparency, and consumer confidence. However, the ESAs cautioned that crypto-assets remain highly volatile and speculative, and not all tokens or services are covered by MiCA’s safeguards.

Consumers were reminded that protection levels vary widely across crypto-asset types, with many lacking comprehensive disclosure, redress mechanisms, or secure storage arrangements. The authorities advised potential investors to learn about the products and providers involved, verify authorisation on the ESMA register, and ensure wallet security—particularly amid growing social media promotion by ‘finfluencers’.

A transitional period applies in some Member States, allowing firms that were operating under national laws before 30 December 2024 to continue until 1 July 2026 or until their MiCA authorisation is granted or refused. The ESAs emphasised that during this period, consumers using services from such firms will not yet benefit from MiCA protections.

The joint warning follows similar alerts issued in 2018, 2021 and 2022, reflecting the regulators’ ongoing concern over retail exposure to unregulated crypto markets.

Read the press release here.