Amid Bitcoin’s (BTC) drop to six-month lows below $30,000 on Tuesday, a Norwegian financial regulator warned investors that the cryptocurrency industry is largely unregulated in the country.
The Financial Supervisory Authority of Norway, or Finanstilsynet, published June 22 a statement on consumer protection of crypto investors, emphasizing that the authority currently does not supervise local crypto companies in terms of anything but money laundering:
“These platforms must notify Finanstilsynet in accordance with the money laundering regulations, but apart from money laundering supervision, Finanstilsynet does not supervise these actors.”
Finanstilsynet further pointed out major crypto trading-associated risks like extreme price volatility and scam vulnerabilities. The authority noted that the formation of crypto prices is “not transparent in many cases.”
The agency went on to say that there is a strong need for a legal framework and investor protection “if cryptocurrency is to become a suitable form of investment for consumers.” Finanstilsynet mentioned that the European Commission introduced a proposal for crypto market regulations last September, expecting to adopt rules on investor protection, market abuse and issuer authorization within five years.
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“Until such regulations are in place, anyone considering trading in cryptocurrency should think carefully and understand the significant risk that such investments entail. Consumers who want to try this should not invest more than they can afford to lose,” Finanstilsynet concluded.
Norway is known as the world’s most cashless country with only 4% of the country’s payments conducted with banknotes and coins. In response to a massive decline in cash usage, the Norwegian central bank initiated research of a central bank digital currency in April 2021.