The Central Bank of Ireland has issued a fresh warning to Irish citizens against investing in crypto assets, citing high risk and low consumer protections in the booming space.

In a statement published on its website today (22 March), the Central Bank highlighted the “risky and speculative nature” of crypto assets as part of a Europe-wide campaign by the European Supervisory Authorities to raise awareness around the issue.

It cautioned that regular people buying crypto in retail are vulnerable to being exploited and need to be alerted to the risks of “misleading advertisements” that are being pushed in Ireland.

The Central Bank particularly pointed out social media platforms are a major culprit, where, it claimed, influencers “are being paid to advertise” crypto assets.

“In Ireland and across the EU we are seeing increasing levels of advertising and aggressive promotion of crypto asset investments,” said Derville Rowland, director of general financial conduct at the Central Bank.

“While people may be attracted to these investments by the high returns advertised, the reality is that they carry significant risk,” she said.

Increasing regulation

This move comes at a time when countries across the world are hurrying to draft policies to regulate the volatile and elusive digital assets space.

Just last week, crypto assets such as bitcoin narrowly escaped being potentially banned in the EU after MEPs debated limiting the use of the energy-intensive assets. Days earlier, US president Joe Biden signed an executive order setting out a comprehensive plan for crypto in the country, including the potential for a US central bank digital currency.

Governments in general are sceptical of private companies selling crypto assets aggressively, often cracking down on them on the ground that they do not adequately highlight the risk involved in investing in a volatile and unregulated market.

In early March, a UK regulator found advertisements by crypto company Floki Inu, some of which were seen on Dublin’s public transport system last year, to be in breach of the country’s advertising standards for taking advantage of consumers’ inexperience with crypto.

“Before you buy crypto assets, you need to think about whether you can afford to lose all the money you invest. Do the promised fast or high returns seem too good to be true?” added Rowland in the Central Bank statement.

“People should also be aware that if things go wrong, you do not have the protections you would have if you invested in a regulated product.”

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