The Swiss Financial Market Supervisory Authority (FINMA) has advised other regulators to take more proactive measures to protect consumers and investors in the increasingly volatile market. The watchdog stated that regulators should offer more protection to consumers from “abuse in the freewheeling sector.”
Chief Executive Officer of FINMA, Urban Angehrn, has likened the recent trading in digital assets to the US stock market in 1928 when all types of abuse and pump and dump were rampant. He was speaking during a conference in Zurich about the digital assets industry and how the regulators have a massive role to play to protect consumers.
Angehrm also reiterated that regulators should think about the potential of technology that has made it easy to deal with large amounts of data. This has necessitated the need for financial, watchdogs to protect consumers and prevent them from trading in abusive markets, he reiterated.
More Regulators Push For Tougher Rules In The Market
Apart from FINMA, other regulators have also expressed their intent to implement stricter rules that govern the digital assets market in their respective jurisdictions. The US regulators have also warned several times about the increasing level of market manipulations. The UK’s Financial Conduct Authority (FCA) has regularly issued warnings regarding similar issues.
These warnings are coming when the crypto market is declining, as major crypto assets keep shedding a lot of their value. For the first time since December 2020, Bitcoin (BTC), the world’s largest crypto asset, dropped below $20,000 this month. Other high-risk assets have also been hit heavily due to rising interest rates amidst increasing inflation.
UK’s FCA Warns Against Fraudulent Schemes
Recently, the UK FCA warned consumers about the high risk of investing in cryptocurrencies. The regulator expressed concerns about the increasing number of posts on social media that promote crypto assets and nonfungible tokens (NFTs). The FCA said there are high levels of fraudulent schemes from those who are taking advantage of the crypto frenzy to dupe consumers. These fraudsters promise lofty returns on investments which are false and deceiving, the watchdog warned.
Moreover, the FCA stated that marketers of crypto assets must adhere to the guidelines set by the Advertising Standards Authority (ASA) and declare that they do not regulate crypto assets. In addition, crypto-assets should be marketed as not being covered by financial compensation schemes. The ASA has investigated ads for cryptocurrencies because they failed to make it clear that the products are not regulated or protected in the country.