The ESMA has recently reminded investment firms to lay out the regulatory status of their products, specifically emphasizing digital assets, amid the pending adoption of applicable laws.
The regulator has further warned that the lack of regulation on cryptocurrency-related operations may lead investors to be misled in terms of the extent of their protection.
Furthermore, the ESMA has advised firms to make sure clients understand the regulatory status of the services they provide, adding that companies must recognize the effect of unregulated activities when constructing risk management systems.
The Comprehensive Crypto Industry Regulation was passed on April 20 and is reportedly set to be put in place by 2025. The EU Council also supported plans to battle money laundering in May.