Digital Assets: Sweden’s Finansinspektionen Warns on Cryptos; Yellen Pans Bitcoin
Finansinspektionen is Sweden’s financial supervisory authority.
Finansinspektionen (FI) was established in 1991 to create a single integrated regulator covering banking, securities, and insurance in Sweden. As the country’s financial supervisory authority, it issued a warning today on the risks surrounding purchases of financial instruments with bitcoin or other crypto-assets as an underlying asset.
Swedish regulator on crypto-based products
FI said in its announcement: “Products 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. That is why we are warning consumers about the risks associated with these financial products.” (FI Director General Erik Thedéen)
“There is a high risk that consumers will lose money on their investment. This type of product is also not subject to the same consumer protection regulations that apply to many other types of investments.”
The warning from FI echoes a similar warning by the U.K.’s FCA last month.
FCA on cryptocurrencies and bitcoin
“The FCA is aware that some firms are offering investments in crypto assets or lending or investments linked to crypto assets, that promise high returns,” the regulator said. “Investing in crypto assets, or investments and lending linked to them generally involves taking very high risks with investors’ money. If consumers invest in these types of products, they should be prepared to lose all their money.”
The FCA added that the “significant price volatility in crypto assets, combined with the inherent difficulties of valuing crypto assets reliably” put consumers at a high risk of losses.
Meanwhile, U.S. Treasury Secretary Janet Yellen was highly critical of bitcoin at the 2021 DealBook DC Policy Project.
Yellen on bitcoin
Yellen deemed bitcoin as “highly speculative,” and said it was an inefficient mode of conducting monetary transactions.
“Bitcoin is an extremely inefficient way of conducting transactions and the amount of energy that’s consumed in processing those transactions is staggering,” she said.
She also said that it was a top priority to ensure that it is not used as a vehicle for illicit transactions. She also called for adequate investor protections.
Related Story: ECB’s Lagarde Lashes Out At Bitcoin
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