The European Union's financial regulator has issued a statement reminding investment firms to make sure their clients are aware of the regulatory status of the products they offer.
In the announcement, the European Securities and Markets Authority (ESMA) highlighted crypto assets and reminded firms that while regulation is ongoing, cryptocurrencies will remain unregulated in most jurisdictions. ESMA stated:
"For crypto-assets in particular, while the regulation of crypto-asset markets (MiCA) is close to adoption, crypto-assets offered by investment firms will remain unregulated in most jurisdictions until MiCA is applied."
ESMA has expressed concern about unregulated product and service offerings. According to the regulator, they carry prudential and investor protection risks. In addition, the financial regulator believes that customers could be "misled about the level of protection they receive."
To mitigate such risks, ESMA recommended that investment firms take steps to make sure their clients know the regulatory status of the products in which they invest. The regulator also advised firms to clearly inform clients when regulatory protections do not apply to their products or services.
In addition, ESMA urged investment firms to consider the impact of unregulated activities on their business when developing risk management policies and systems.
Meanwhile, crypto companies are beginning to emerge in Ireland to expand their operations in Europe. On May 25, crypto company Gemini chose Ireland as its European base . Gemini founder Cameron Winklevoss confirmed that the company has chosen Ireland as its "entry point into the EU."
In addition to Gemini, the cryptocurrency exchange Kraken has also begun preparations to expand its operations in Europe . On April 18, the exchange's Dublin-based subsidiary received authorization as a virtual asset service provider from the country's central bank.
