The Swedish financial regulator believes that private investors should stay away from financial products based on volatile cryptocurrencies.

The Swedish financial supervisory authority Finansinspektiven (short: FI) has issued a new warning to private traders because of the high risks and low consumer protection associated with crypto investments

In an announcement on Monday, the regulator wrote that while it had already issued a warning regarding the risks associated with Crypto Legacy trading, it would publish further advice after a more comprehensive study of the crypto asset space.

The FI said it had „conducted a thematic review of the market for financial instruments based on crypto-assets.“ The FI General Director Erik Thedeén said:

„Products based on crypto-assets are unsuitable for most, if not all, retail customers. Existing consumer protection is inadequate and crypto-assets are difficult, if not impossible, to value on a credible basis.“

Thedeén’s view is reinforced by the fact that consumer protection legislation in Sweden does not fully protect investors from the risks of purchasing financial products or instruments that use crypto assets.

There is currently high volatility in the spot and derivatives markets for cryptocurrencies. Bitcoin has lost over 17 percent in value in the past 24 hours and BTC futures positions worth $ 5.64 billion have been liquidated over the same period .

The Swedish financial authorities are skeptical about the health and impact of the cryptocurrency markets. The country’s central bank is currently running a research and development pilot project for a centrally issued e-krona that is intended to complement cash.