The Financial Stability Board (FSB) announced on Monday that it would give a report which outlines a rigid regulatory framework for digital assets to Finance ministers and the Governors of the respective central banks of G20 nations.

On the other hand, the chair of the European Securities and Markets Authority (ESMA), Verena Ross, warned the general public about investing in cryptocurrencies. She also said that there was no chance of a European bailout for out-of-pocket crypto investors.

“We already warned earlier this year . . . about the serious risks retail investors were taking investing in some of the crypto assets.”

Ross was majorly worried about the losses of small investors, as she noted a 70% fall in total crypto market capitalization. She was also worried about crypto firms which would eventually fall into this environment.

“I think there is a real question about whether many of these [crypto assets] will survive.”

She says that investors must take note of events in the crypto industry and make sure they learn a “cautionary lesson” to at least “think about how much of their money they invest in these kinds of assets.”

This is not the first time European watchdogs are warning against crypto. Other leading European financial regulators including the ESMA have warned consumers that “many crypto assets are highly risky and speculative,” noting that investors “face the very real possibility of losing all their invested money if they buy these assets.”

Christine Lagarde, the president of the European Central Bank (ECB) had claimed that crypto and DeFi could cause harm and instability to traditional financial markets. The rapid growth of crypto markets and services is worrying regulators due to the increasing correlation between the traditional financial sector and the crypto sector.

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