Crypto brings opportunities, but also risk. Here are the main dangers, the rules and the advice for getting started safely.
Cryptocurrency fluctuates a lot in value. Prices are driven by the economy, regulation, news and pure speculation.
Even stablecoins are not risk-free. Several have lost their peg to the dollar, especially where the reserves have been unclear.
The biggest risk rarely lies in the blockchain itself, but in exchanges, wallets and smart contracts. The collapses of Mt. Gox and FTX showed that customer funds can be lost when a central party fails.
Fraud is widespread, including fake investment projects, phishing and fake customer support. Promises of high and safe returns are almost always a warning sign.
In the EU, the MiCA regulation applies. It requires crypto exchanges and other services to be licensed and sets rules for stablecoins. MiCA is also being introduced in Norway through the EEA agreement.
Crypto exchanges must also know their customers and follow anti-money laundering rules. Gains on crypto are taxable, and the rules vary between countries.
Use a regulated provider, such as a licensed crypto exchange or a bank that offers exchange-traded crypto products. Start with a small amount and learn how transfers and fees work.
If you hold crypto yourself, use a hardware wallet for larger amounts and store the recovery phrase offline. Turn on two-factor authentication, and always double-check the address before you send.