The European Securities and Markets Authority (ESMA) issued a public statement warning investors of the ‘halo effect’ that can lead to overlooking risk when authorised cryptoasset service providers (CASPs) offer both regulated and unregulated products and/or services.
The statement also reminded CASPs of the issues that they should consider when providing unregulated products and services, recommending that they should be particularly vigilant about "avoiding any client confusion regarding the protections attached to unregulated products and/or services."
ESMA said that in order to avoid any misunderstanding "CASPs should clearly communicate the regulatory status of each product or service in all client interactions and at every stage of the sales process."
In addition, ESMA reminded cryptoassets entities of their obligation "to act fairly, professionally and in the best interests of their clients, ensuring that all information, including marketing communications, is fair, clear and not misleading."