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Dutch Regulator Warns against Retail Crypto Investments

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The Dutch financial market supervisor, locally known as Autoriteit Financiële Markten (AFM), issued a fresh warning on Wednesday against investing in cryptocurrencies by retail investors.

“The AFM advises against putting money in cryptos that are needed in the short or longer term,” the Dutch regulator stated (translated from Dutch). It is one of the many warnings the AFM has issued against crypto since 2017.

Additionally, the regulator stressed that it cannot supervise crypto trading like it does for other regulated asset classes, but it is still monitoring the developments in the cryptocurrency markets.

The warning followed some research conducted by the AFM last August to learn more about the trends of retail cryptocurrency investments. A total of 402 participants responded to the regulator’s questionnaires, among which 148 respondents invested in crypto along with other assets, while 254 respondents only own cryptos.

Moreover, the regulator elaborated that Dutch people are investing in
 
 cryptocurrencies 
with small amounts: two-thirds of 1.2 million nationals that have purchased digital currencies are only putting less than €2,500, whereas half of them are investing below $500.

Many Risks

Despite the small investments, the AFM remains concerned about the risks of cryptocurrencies like a collapse of value, the complexity of instruments, and the lack of regulatory protection.

However, the regulator pointed out that the European Union’s Markets in Crypto-Assets
 
 Regulation 
(MiCAR) is expected to be enforced in 2024 that will put a part of the cryptocurrency market under regulatory scrutiny.

While the AFM and a few other developed country regulators are only issuing warnings against crypto investments, the Indian government is planning to ban crypto investments and even criminalize any violations with hefty fines and imprisonment.

The Dutch financial market supervisor, locally known as Autoriteit Financiële Markten (AFM), issued a fresh warning on Wednesday against investing in cryptocurrencies by retail investors.

“The AFM advises against putting money in cryptos that are needed in the short or longer term,” the Dutch regulator stated (translated from Dutch). It is one of the many warnings the AFM has issued against crypto since 2017.

Additionally, the regulator stressed that it cannot supervise crypto trading like it does for other regulated asset classes, but it is still monitoring the developments in the cryptocurrency markets.

The warning followed some research conducted by the AFM last August to learn more about the trends of retail cryptocurrency investments. A total of 402 participants responded to the regulator’s questionnaires, among which 148 respondents invested in crypto along with other assets, while 254 respondents only own cryptos.

Moreover, the regulator elaborated that Dutch people are investing in
 
 cryptocurrencies 
with small amounts: two-thirds of 1.2 million nationals that have purchased digital currencies are only putting less than €2,500, whereas half of them are investing below $500.

Many Risks

Despite the small investments, the AFM remains concerned about the risks of cryptocurrencies like a collapse of value, the complexity of instruments, and the lack of regulatory protection.

However, the regulator pointed out that the European Union’s Markets in Crypto-Assets
 
 Regulation 
(MiCAR) is expected to be enforced in 2024 that will put a part of the cryptocurrency market under regulatory scrutiny.

While the AFM and a few other developed country regulators are only issuing warnings against crypto investments, the Indian government is planning to ban crypto investments and even criminalize any violations with hefty fines and imprisonment.

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