In another example of market volatility, Bitcoin has dropped below $50,000 once again after hitting local highs. As a result, the overall market sentiment has turned slightly bearish. Amidst this pullback, the regulators in Sweden have gone ahead to criticize the flagship cryptocurrency, urging retail investors to stay from financial products that have volatile cryptocurrencies as their underlying asset.
Finansinspektionen, Sweden’s financial regulator, has recently issued a warning to retail traders about the various risks and the lack of consumer protection involved in crypto. Published on February 22, the announcement stated that while the regulator had already issued a warning regarding the risks associated with bitcoin trading, it was publishing further advice after having completed a wider study of the crypto-asset sector.
The regulator has reportedly carried out a “thematic review of the market for financial instruments with underlying crypto-assets.” According to Finansinspektionen’s Director General Erik Thedeén:
“Products based on crypto-assets are unsuitable for most, if not all, retail consumers. The consumer protection available is inadequate, and crypto-assets are difficult, if not impossible, to value on a credible basis.”
Thedeén’s concerns are justified because of the fact that consumer protection regulations in the nation do not protect investors from the risks involved with purchases of financial products or instruments that have crypto assets as an underlying asset.
However, despite the skepticism about the impacts of the volatile cryptocurrency markets, the nation continues researching its own government-backed digital currency. In December last year, the Swedish government announced the launch of a formal review of a potential transition to a digital era with its e-krona.
Regulators thrash Bitcoin
Meanwhile, in the U.S., Treasury Secretary Janet Yellen went on to call Bitcoin “highly speculative” and “inefficient” for transactions. “Bitcoin is an extremely inefficient way of conducting transactions and the amount of energy that’s consumed in processing those transactions is staggering,” Yellen said at the 2021 DealBook DC Policy Project.
As previously reported by The Daily Chain, Yellen has also voiced concerns about cryptocurrency misuse becoming a “growing problem.” But according to data from crypto intelligence firm Chainalysis, the rate of crypto crimes have dropped to 0.34% in 2020, from over 2% the previous year