The European Securities and Markets Authority (ESMA), the EU’s financial markets regulator and supervisor, issued today a public statement warning investors of the ‘halo effect’ that can lead to overlooking risk when authorised crypto-asset service providers (CASP’s) offer both regulated and unregulated products and/or services.
The statement also reminds CASPs of the issues that they should consider when providing unregulated products and services, recommending that they should be particularly vigilant about avoiding any client confusion regarding the protections attached to unregulated products and/or services.
To avoid any misunderstanding CASPs should clearly communicate the regulatory status of each product or service in all client interactions and at every stage of the sales process.
In addition, ESMA reminds crypto-assets entities of their obligation to act fairly, professionally and in the best interests of their clients, ensuring that all information, including marketing communications, is fair, clear and not misleading.
