The European Securities and Markets Authority issued a public statement warning investors that the “halo effect” can cause risks to be overlooked when authorised crypto-asset service providers offer a mix of regulated and unregulated products and services. The statement also reminds crypto-asset service providers to be vigilant about avoiding client confusion over what protections apply to unregulated offerings. ESMA recommends clearly communicating the regulatory status of each product or service in all client interactions and at every stage of the sales process, and reiterates firms’ obligation to act fairly, professionally and in clients’ best interests, including ensuring marketing communications are fair, clear and not misleading.
European Securities and Markets Authority 2025-07-11
European Securities and Markets Authority warns investors about halo effect when authorised crypto providers sell unregulated products
The European Securities and Markets Authority (ESMA) issued a warning about the "halo effect" leading investors to overlook risks when authorised crypto-asset service providers offer both regulated and unregulated products. ESMA advises these providers to clearly communicate the regulatory status of each offering to prevent client confusion and ensure fair, professional conduct.