Finanstilsynet warns of high risks in cryptocurrency investments

In a new report focusing on consumer protection in finance, Finanstilsynet warns of significant losses in investing in cryptocurrency. Finanstilsynet highlights that cryptocurrency is unregulated, and there is no legally established consumer protection for buyers of cryptocurrency. As a result, there is a high risk of losses for investors who are not familiar with the market.

Scammers use various techniques, such as spam, computer viruses, and fake drawings, to deceive consumers. This makes it difficult to navigate the market, and the risk of losses is significant. The cryptocurrency market has also attracted significant criminal activity.

Finanstilsynet refers to the fact that platforms have a reporting obligation to Finanstilsynet under anti-money laundering regulations, but beyond anti-money laundering supervision, the agency does not provide any other oversight of these players. The agency also points out that the low interest rates in recent years have increased demand for new investment alternatives, including cryptocurrency.

The Tax Administration has identified between 60,000 and 70,000 taxpayers who own cryptocurrency and estimates that 300,000 people own cryptocurrency in total. Other surveys suggest that the actual number is well over 400,000.

Finanstilsynet believes that there is a strong need for legal frameworks and investor protection if cryptocurrency is to become a suitable form of investment for consumers. Since 2013, Finanstilsynet and the financial supervisory authorities in the EU have warned of the risks associated with investing in cryptocurrency.

The agency is awaiting regulatory proposals in the EU, which now appear to be approaching the final stage. The proposal includes rules on market abuse, authorization of issuers, and investor protection.

Consumers should be cautious when considering investing in cryptocurrency and conduct thorough research before making a decision. It is important to be aware of the risk of scams and significant losses and to stay informed about market developments.