Norway’s Financial Regulator Issues Crypto Investment Warning
Finanstilsynet, Norway’s financial regulator has warned investors to be wary of the risks associated with crypto investments. The warning comes as cryptocurrency prices continue to decline with Bitcoin sipping below $30,000 for the first time in six months.
Don’t Risk it All on Crypto, Finanstilsynet Warns
The Financial Supervisory Authority of Norway (Finanstilsynet) has issued a crypto investment warning on its website on Tuesday (June 22, 2021). In a post written by the agency’s consumer coordinator Jo Gjedrem, Norway’s regulatory watchdog advised residents to not risk it all on virtual currency investment vehicles.
According to the post, crypto became a popular investment option especially for retail investors amid the ongoing COVID-19 pandemic. However, Finanstilsynet says that it shares similar concerns as those espoused by regulators across the European Union (EU) even if crypto continues to gain popularity.
Detailing some of its criticisms against the crypto market, Gjedrem stated:
“Most cryptocurrencies are subject to extreme price fluctuations. The risk of loss is high. A cryptocurrency normally has only one value within the system that has established it, in contrast to traditional investment alternatives that are linked to e.g., commodities and stocks. Price formation is in many cases not transparent.”
The Finanstilsynet also espoused other popular anti-crypto arguments such as the activities of scammers and criminals and the lack of clear-cut regulations. According to the statement, Norway’s financial regulator only monitors compliance with anti-money laundering regulations in the crypto space.
Commenting on the absence of a firm regulatory standard for crypto, Gjedrem remarked: “There is a strong need for a legal framework and investor protection if cryptocurrency is to become a suitable form of investment for consumers.”
Tuesday’s warning comes amid a continuation of the price bloodbath for cryptocurrencies with token prices plummeting to six-month lows. Bitcoin is below $30,000 for the first time since January while several altcoins have plunged over 70% from their April/May price highs.
Bitcoin Adoption in Norway
Gjedrem’s warnings are in contrast with the recent positive attitude towards cryptocurrencies even from within government agencies in Norway. Earlier in June, Norway’s finance minister Jan Tore stated that the cryptocurrency price volatility will eventually give way to more stable price action leading to significant breakthroughs in the industry.
Norwegian billionaire Kjell Inge Rokke has recently echoed support for Bitcoin stating that BTC could end up being worth millions of dollars. Rokke’s Aker ASA conglomerate also bought Bitcoin back in March.