The cryptocurrency scene is still in its toddler days and with no regulatory framework to protect investors, experts have warned cryptocurrency investors to look out for themselves as there is no one to protect their investments if things take a turn for the worse.
Jesse Powell, co-founder and chief executive of San Francisco-based cryptocurrency exchange Kraken, has urged investors to look out for themselves and do proper research before throwing money at ICOs and cryptocurrencies in general.
While he has a bullish take on the cryptocurrency market in 2018, he said that investors shouldn’t rely on any particular exchange to protect them from market volatility. While Kraken has a rigorous vetting process for any new coin listing, the risk can’t be nullified by any amount of processes in place.
“We make no promises about the future of any coin, things can change when you raise $1 billion in 10 minutes,” he added.
The comments come on the heels of a multiple-day systemwide outage that Kraken suffered in January while they were upgrading their trade engine, an event that was supposed to take a couple of hours. And while Kraken wasn’t hacked, the outage spooked cryptocurrency traders.
Powell’s remarks on the risks associated with cryptocurrencies come as policymakers around the world are grappling for tighter control over the market. EU regulators, for instance, just issued a joint warning to investors about “highly speculative” cryptocurrencies, urging them to refrain from investing more than they can afford to lose.