Crypto – Consumer Information

• You may lose your money
  Consumers could face the possibility of losing all their money if they buy crypto. If you are thinking about buying crypto or related products and services, you should ask yourself if you can afford to lose some or even all of the money you spend.
  
  

• Misleading information
  Beware of the presence of misleading or unverified information about crypto in advertising. Some crypto and related products are aggressively advertised using information that is confusing, incomplete, inaccurate and at times deliberately misleading. Be alert to the risks of misleading advertisements, including via social media and influencers.
  
  

• Extreme price movements
  Crypto can be subject to sudden and extreme price movements. Buying crypto is therefore speculative, making it unsuitable as a store of value.
  
  

• Fraud and manipulation
  Crypto scams are common. Such scams aim to deprive you of your money using a variety of techniques, including phishing. Be wary of organisations/individuals who are pressuring you to invest “ASAP”, or are promising fast/high returns. If you are offered something that seems too good to be true, it is most likely a scam.   

Read our explainer to find out more about how you can protect yourself from financial scams.

• Low level of protection
  Crypto is not protected by any form of compensation scheme, so there will be no compensation if you lose some or all of your money.

Over the past number of years, Central Bank of Ireland, along with the European Banking Authority and the European Securities and Markets Authority, has issued a number of warnings on crypto-related products:

• Central Bank of Ireland warning on investing in crypto-assets
• Central Bank of Ireland Consumer Warning on Virtual Currencies
• European Supervisory Authorities warn consumers of the risk of crypto-assets - 2022

Central Bank of Ireland has a strong focus on technological innovation that promotes better outcomes for society and the financial system, while managing risks.

Crypto is not a regulated financial product, it is highly risky and speculative, and it may not be suitable for retail customers. It is important to be aware of the risks of misleading advertisements, particularly on social media, where some influencers are being paid to advertise crypto and crypto-related products.

Before you buy crypto, you need to consider if you can afford to lose all of the money you spend. Do the promises of fast or high returns seem too good to be true? If things go wrong, you do not have the protections you would have if you invested in a regulated financial product.

See also: Governor's Blog - Crypto and how we can protect the consumer

The European Commission has led development of the new Markets in Crypto-Assets Regulation (MiCAR). This new legislation will, on a phased basis from mid-2024, introduce a new regulatory framework for European crypto-assets. MiCAR will also introduce obligations for issuers of crypto-assets and crypto-asset service providers to ensure marketing communications are fair, clear and not misleading.

MiCAR is a step forward. However, even when MiCAR is implemented, there is no such thing as safe crypto. Consumers could still lose their money, and there are no safeguards like those in place for traditional financial products (e.g. Deposit Guarantee Scheme and Investor Protection Scheme).

Find out more about Markets in Crypto-Assets Regulation (MiCAR)