And the legislation that must be in place in a few years’ time will not take away those concerns, warns top woman Laura van Geest of the regulator in conversation with the House of Representatives. It is a “first, cautious step” and legislation “could give the wrong impression” that cryptocurrencies are normal financial products.
Crypto coins are not coins, Van Geest emphasized again to MPs on Wednesday. “They are phenomena that are unmonitored and that are very volatile and vulnerable to scams and all kinds of accidents,” said the regulator. She compares the crypto market to a gambling hall. People are also allowed to go there freely, “but then they also have to realize that it is really a risky exercise.”
Consumer protection
From 2024, a European regulation (MiCA) should provide better protection for consumers who invest in crypto coins. But Van Geest “does want to do expectation management”: not all risks are removed. For example, there is “less regulation than you might wish” and cryptocurrency remains “less regulated than other products.” This also limits the AFM as a supervisory authority, says Van Geest.
The authority has been warning for years about the risks of cryptocurrencies, the value of which is mainly based on speculation. Many cryptocurrencies have recently lost a lot of value, but they remain popular. Van Geest updated the House on financial stability in the Netherlands and called it important to warn against “potential misery” with crypto coins.