Crypto assets are "highly risky and speculative" and people need to be alert to the risks of misleading advertisements, particularly on social media, where influencers are being paid to advertise them, the Central Bank has warned.
Cryptocurrencies, also known as digital currencies or virtual currencies, are a form of digital money. They allow payments to be made electronically and function in a similar way to standard currencies that use physical cash.
However, unlike standard currencies that can be exchanged physically using notes and coins, cryptocurrencies are only exchanged electronically using lines of computer code.
Examples of well-known cryptocurrencies are bitcoin and ethereum, but a wide range of others also exist.
The Central Bank on Tuesday issued a warning on the risks of investing in crypto assets, as part of a European-wide campaign by the European supervisory authorities.
It emphasised that crypto assets are “highly risky and speculative, and may not be suitable for retail customers”. In particular, it said, people need to be alert to the risks of misleading advertisements, particularly on social media, where influencers are being paid to advertise crypto assets.
Central Bank director general financial conduct, Derville Rowland, said: "In Ireland and across the EU, we are seeing increasing levels of advertising and aggressive promotion of crypto asset investments.
“While people may be attracted to these investments by the high returns advertised, the reality is that they carry significant risk.
“Before you buy crypto assets, you need to think about whether you can afford to lose all the money you invest. Do the promised fast or high returns seem too good to be true?
“People should also be aware that if things go wrong, you do not have the protections you would have if you invested in a regulated product.”
