ESMA warns growing crypto ties could amplify risks to traditional finance
The EU securities regulator flagged tokenized equities, DeFi exploits and prediction markets as areas where growing crypto ties could pose risks to the broader financial system.
The EU securities regulator flagged tokenized equities, DeFi exploits and prediction markets as areas where growing crypto ties could pose risks to the broader financial system.
Europe’s securities regulator has warned that growing links between crypto and traditional finance could increase the risk of shocks spreading across the broader financial system.
In its latest risk monitoring report published Thursday, the European Securities and Markets Authority (ESMA) called for closer monitoring of the “growing linkage between increasingly vulnerable crypto-asset markets and the broader financial system.”
ESMA also flagged prediction markets as an emerging risk, warning of heightened concerns around insider trading and market manipulation. The regulator said crypto use in prediction markets can make it harder to detect insider trading, wash trading and coordinated market manipulation.