Norwegian financial regulator warns of Bitcoin investing if the price falls – regulation Bitcoin News

The Norwegian Financial Supervisory Authority (Finanstilsynet) warned investors not to invest in cryptocurrencies as Bitcoin prices plummeted on Tuesday. “If cryptocurrencies are to become a suitable form of investment for consumers, a legal framework and investor protection are urgently required,” wrote the consumer coordinator of the regulatory authority.

Norway’s financial regulator warns of crypto risks

The Norwegian financial regulator Finanstilsynet published a warning on its website on Tuesday about the risks of investing in Bitcoin and other cryptocurrencies. It was written by the regulator’s consumer coordinator, Jo Gjedrem, an attorney for the Norwegian consumer authority that described the Finanstilsynet. The warning was released when Bitcoin price fell below the $ 30,000 level on Tuesday.

Gjedrem first noted that during the coronavirus pandemic, Norwegian consumers were increasingly looking for new investments and “cryptocurrency has received the attention that very few other investment options have”. He stated, “The technology is new and exciting, high-profile investors and celebrities have shopped, and influencers are marketing it on social media.”

However, the Finanstilsynet consumer coordinator warned:

Most cryptocurrencies are subject to extreme price fluctuations. The risk of loss is high … The market has also attracted significant criminal activity. Scammers use spam, computer viruses, fake drawings, and a variety of other techniques to deceive consumers.

He explained that cryptocurrency in Norway is largely unregulated and, unlike traditional investments, there is no statutory consumer protection for buyers of cryptocurrencies.

In addition, Gjedrem emphasized that cryptocurrency trading platforms in Norway are only required to comply with anti-money laundering (AML) regulations and that the Finanstilsynet does not oversee them.

Gjedrem noted:

In order for cryptocurrencies to become a suitable form of investment for consumers, a legal framework and investor protection are urgently required.

The lawyer pointed out that the European Commission presented a proposal to regulate the cryptocurrency market in September 2020. The proposed rules, due to come into force in four years’ time, cover various areas, including market abuse, issuer authorization and investor protection.

“Until such regulations are in place, anyone considering cryptocurrency trading should think carefully and understand the significant risk that such investments pose,” concludes the Finanstilsynet post. “Consumers who want to try this with open eyes shouldn’t invest more than they can afford to lose.”

What do you think of the Norwegian Financial Supervisory Authority’s warning? Let us know in the comment section below.

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