Ireland’s central bank (CBI) has become the latest European regulator to warn retail investors of the risks of crypto assets.
The CBI’s director general of financial conduct Derville Rowland said that crypto assets carry “significant risks” and highlighted misleading ad campaigns.
“People should be aware that if things go wrong, you do not have the protections you would have if you invested in a regulated product,” said Rowland.
Her warning is part of a wider campaign on the part of Europe’s supervisory authorities, including the European Central Bank and the European Securities and Markets Authority.
Regulators have been spurred into action by the rapid rise in ad campaigns from unregulated crypto companies and the use of social media and influencers to target retail investors.
Less though has been said about regulation relating to the use of crypto assets in mutual funds available to retail investors.
While qualified investors and alternative investment funds are able to invest in funds with exposure to crypto, this is not currently the case for Ucits funds available to the retail market.
Most European jurisdictions seem willing to wait for more clarity over the regulatory status of virtual assets like crypto before amending mutual fund rules.
However, this has sparked some concern that waiting too long for clarity will leave regulated fund managers unable to meet growing consumer demand for crypto investment products.
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