The Dutch Authority for the Financial Markets (AFM) is responsible for supervising the operation of the financial markets and has been in existence since 1 March 2002. The AFM supervises the conduct of the entire financial market sector in the Netherlands; savings, investment, insurance, and loans.

According to the AFM “more than half a million Dutch people risk losing a part of their assets when investing in crypto”. Therefore, the AFM again warns against investments in cryptocurrency and Initial Coin Offerings. A classic bubble or scam is lurking according to the AFM.

Today the AFM published an annual report in which they call for vigilance towards cryptos, ICOs, and futures on Bitcoins. Futures are an agreement to buy or sell an asset on a specific future date at a specific price. The AFM will continue to warn consumers against investing in assets within the cryptocurrency market.

Losing your entire investment

According to the AFM, the ‘hype’ surrounding cryptos and ICOs can ‘blind investors for the risks associated with these products’. Because of this, investors run a high risk of losing their entire investment.

Investing in futures is a good example of these high risks for investors. With futures, you speculate on the price of Bitcoin, which has proven to be very unpredictable. Who looks at the charts of Bitcoin over the last few years, can see that the price can shoot up significantly, but can also go down just as deep. Today, for instance, the price of Bitcoin shot up from $ 6800 to $ 8000 in 30 minutes. This after a week of almost no price movement.

Together with the European Securities and Markets Authority (ESMA) the stock market watchdog is investigating whether regulations for Cryptocurrencies should be introduced. Most likely, more information about European regulations will be shared in July 2018.


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