Poland’s financial regulator, the Polish Financial Supervision ‎Authority (KNF), has warned consumers looking to profit from the latest crypto boom to be ready to lose everything. The KNF’s concerns include price volatility, the complexity of products offered and the lack of consumer protection regulation around many of crypto assets.

The price of Bitcoin, which rose more than 30 percent over the last few months, has made the cryptocurrency a household investment. However, the most popular crypto coin collapsed as much as 23 percent over the last three days.

“In such circumstances, entities begin to appear using the so-called aggressive marketing (including incomplete or insufficient for risk assessment information), to offer the opportunity to invest in crypto-assets, including virtual currencies. Locals often lack the knowledge and awareness of the risks associated with such forms of investment,” the watchdog said.

Additionally, the authority noted the lack of proper regulations in place and that crypto is difficult to understand and convert back to cash. Thus, crypto assets are somewhat murky investments and are difficult to be kept safe, unlike ‎strictly regulated traditional financial markets.

“The Polish Financial Supervision Authority (UKNF) reminds potential investors about the risks that exist related to the acquisition and trading of broadly understood crypto assets, including virtual currencies,” the KNF added.

A Surge in Impersonation Scams

The Warsaw watchdog added it was aware of investment cold-calls, which featured the regulator’s name being involved in monitoring the progress of proposed crypto-asset transactions. The general setup seems to be that the fraudsters call a consumer, ask them to sell or buy cryptocurrencies, and then tell them that KNF staff will participate in the process to ensure the consumer’s investment is legal.

Once fraudsters have targeted an investor for one of these crypto scams, they are relentless in their communications. Phone calls start out as friendly and business-like, albeit usually very persistent. Meanwhile, the regulator urges customers concerned about or involved in such transactions, to get in touch.

According to the KNF’s website, trading in crypto-assets and trading venues themselves are not prohibited by law, and therefore, its transactions are ‘legal in the territory of the Republic of Poland.’

Poland has made localized attempts to regulate specific aspects of cryptocurrencies. While some of those instances are more concerning than others, none of it has officially banned the virtual asset class. Instead, the country has taken a stance similar to other countries to regulate the sector and prevent its use in criminal activities.