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Sweden's financial regulator thinks retail investors should stay away from financial products that have volatile cryptocurrencies as their underlying asset.
Sweden's financial regulator, Finansinspektionen, or FI, has issued a fresh warning to retail traders about the high risks and low consumer protections associated with crypto-related investments.
In an announcement published on Monday, the regulator wrote that while it had already issued a warning regarding the risks associated with Bitcoin (BTC) trading, it was publishing further advice following its completion of a wider study of the crypto-asset sector.
The FI said it has carried out a âthematic review of the market for financial instruments with underlying crypto-assets.â FI Director General Erik ThedeĂ©n said:Â
âProducts based on crypto-assets are unsuitable for most, if not all, retail consumers. The consumer protection available is inadequate, and crypto-assets are difficult, if not impossible, to value on a credible basis.â
ThedeĂ©n's view is compounded by the fact that consumer protection regulations in Sweden do not comprehensively protect investors from the risks tied to purchases of financial products or instruments that have crypto assets as an underlying asset.Â
The FIâs warning coincides with a period of marked volatility in the cryptocurrency spot and derivatives markets. Bitcoin dropped more than 17% in value over the last 24 hours, and $5.64 billion worth of BTC futures positions were liquidated in the same time period.
While the Swedish financial authoritiesâ skepticism about the health and impact of the cryptocurrency markets is evident, the countryâs central bank is pursuing a research and development pilot for a centrally issued e-krona that could provide a complement to cash.
Disclaimer
The views and opinions expressed in this article are solely those of the authors and do not reflect the views of Bitcoin Insider. Every investment and trading move involves risk - this is especially true for cryptocurrencies given their volatility. We strongly advise our readers to conduct their own research when making a decision.