France’s Financial Markets Authority (AMF) Sees Increase in Crypto Complaints Per Its 2019 Risk Map
Crypto is undoubtedly becoming more popular as more people are beginning to make use of it as a means of payment or investment, more merchants are beginning to accept it in exchange for goods and services and more institutional funds are being pushed into crypto as a whole.
Besides the benefits that are going to be seen with the increasing of crypto adoption, there are also implications for various financial regulators as more businesses are being started up that have to do within the crypto space and as such, they will have more interaction with the crypto industry.
As such, there is no surprise that the French financial regulators have stated that they have seen an increase in complaints regarding cryptocurrencies in the last year.
This comes via a July 2, 2019 risk report that was published by the Financial Markets Authority in France which states are investors in the country are filling more and more complaints regarding digital currency with the authority.
The risk report goes into an analysis of the factors that have made an impact on the country's financial markets as well as the risks that are associated with it.
The report states that there was a drop in the number of inquiries that the EMF received by their consumer Contact Centre with regards to cryptocurrency. It was also noted that investors have continued to express interest in various speculative products such as foreign exchange, contracts for difference and cryptocurrency even though the EMF has tried to limit the marketing of products in that regard. Of the 151 warnings that were issued EMF between 2016 and 2018, 118 of those were crypto related.
In their annual report that was released in May 2019, the EMF also stated that there was a 14,000 percent increase in inquiries related to fraudulent crypto offers in the year 2018 when compared to the year 2016. The number of complaints that had to do with cryptos was reported as 2600 in 2018 from only 18 in 2016.
These show a peculiar pattern in that cryptocurrency, while has been increasing in popularity, has also been forced to combat the fraud that exists in that space as investors are targeted with fraudulent offers in a bid to play on the lack of readily available information about the crypto industry in order to get them to hand over their funds.
This pattern is observed in almost every emerging industry and it is believed that as the industry matures, there will be more resources and information available to make sure these crimes are stopped in their tracks. It should also be noted that this is not a problem exclusive to France as the SEC, throughout 2018, was forced to shut down several initial coin offerings for being fraudulent or unregistered.
One of the responses to this problem has been proper crypto regulations being put in place around the world to make sure that those within the industry have proper guidelines that they are required to follow.
Still, there has been a push from several bodies such as the FCA in the United Kingdom to educate investors on the risks of dealing in cryptocurrency as well as how to spot potential scams and fraud.