Regulatory Alerts2024-04-09
Risks in the Choice Environment of Crypto Apps
The Dutch Authority for the Financial Markets (AFM) warns that crypto apps employ nudging and activation elements that encourage frequent trading and investment in products unsuitable for the user's best interest. Although the Markets in Crypto-Assets Regulation (MiCAR) strengthens consumer protection, it does not regulate the design of the choice environment, leaving significant risks for inexperienced investors. The AFM advises consumers to remain vigilant and only trade with disposable funds, while committing to discuss the need for careful app design with European policymakers.
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