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According to Ireland’s central bank’s financial conduct director, cryptocurrency investors should be prepared to lose all of their assets.
Following a huge market sell-off, Ireland’s central bank director general for financial conduct is the latest official to raise concerns about Bitcoin (BTC) and the cryptocurrency business.
The growing popularity of cryptocurrencies like Bitcoin is “of great concern,” the Central Bank of Ireland’s Derville Rowland warned, Bloomberg reports Monday.
“Crypto assets are quite a speculative, unregulated investment,” Rowland said, adding that investors should be “really aware they could lose the entire investment.” This comes after crypto markets lost over $1 trillion in a couple of days in one of the largest historic crypto sell-offs.
Rowland’s perspective on the crypto is set to contribute to the global regulation of the space as the official will take over as chairwoman of the European Securities and Markets Authority’s investment management standing committee in July. Earlier this year, the financial authority outlined the same concerns around crypto, stating that these types of assets are not regulated and pose significant risks for investors due to its highly volatile nature.
One of the top executives at Ireland’s central bank, Rowland is known for her stringent stance on financial violations as well as involvement in major enforcement investigations. In March, the central bank fined Ireland’s largest stock broker, Davy, for breaching market rules, eventually pushing the firm to put itself up for sale.
Aside from crypto, Rowland is said to have discussed the issue of “gamification” of stock investment, alluding to coordinated trading via social media platforms such as Reddit-driven GameStop short squeeze. According to the person, the ESMA and Ireland’s central bank have discussed the matter. While no timetable for new standards has been established, Rowland believes that laws should be “technology neutral,” so that “you are not getting better protections in older paper-based processes than you are in more online processes.”
Recently, a number of central bank officials have issued warnings against crypto investing. Prior to a drop in crypto markets in early May, Bank of England governor Andrew Bailey warned that cryptocurrencies have no fundamental value and that consumers should only acquire them if they are willing to lose money. Last week, Bank of Japan Governor Haruhiko Kuroda criticized Bitcoin, claiming that the vast majority of transactions was speculative.