Crypto 

What you need to know about crypto

Crypto-assets can seem like an attractive alternative to more traditional investments. They are now widely available and easy to access through online platforms and apps, and some are offered by firms that are registered with and regulated by the Central Bank of Ireland or other European financial supervisors. 

However, crypto-assets are highly volatile – their value can rise or fall very quickly – and they are very risky. You could lose some or all the money you invest, which means they are not suitable for most retail investors. You should only ever invest money that you can afford to lose. 

Understanding the risks of crypto

Crypto‑assets are very different from traditional money and investments. While they can be used for trading, investing or payments, they carry significant risks that all consumers should understand before getting involved. 

No safety net if things go wrong

Crypto‑assets are not protected by statutory compensation schemes such as the Deposit Guarantee Scheme or the Investor Compensation Scheme. If a crypto provider fails, is hacked or turns out to be fraudulent, you will usually not be entitled to compensation. Even with new European rules regulating some crypto‑assets, they do not offer the same level of protection as traditional financial products.  

High price volatility

Crypto prices can rise or fall suddenly and sharply, sometimes within minutes. This volatility means that crypto is highly unpredictable and unsuitable for people who cannot afford large or fast losses. Regulators consistently describe crypto as a speculative asset, not a stable store of value. A sharp rise in price can be followed by a steep fall with little or no warning. 

Watch this video on crypto volatility

Scams are widespread and increasingly sophisticated

Crypto‑related scams are common and growing in scale. Irish authorities, EU regulators and Europol all warn that fraud linked to crypto investments is now one of the fastest‑growing forms of financial crime. 

In 2025, Europol reported the taking down of multiple international crypto fraud networks that stole hundreds of millions of euro from thousands of victims across Europe and beyond. These scams often involve fake trading platforms, manipulated dashboards, social‑media advertising and long‑term “trust‑building” tactics.  

As crypto losses are not covered by compensation schemes, money lost to scams is usually gone for good – even when the scam involves a seemingly professional or well‑designed platform.  

Common types of crypto scams

Authorities such as the Gardaí and Europol highlight several recurring scam patterns: 

Fake investment platforms

Professional‑looking websites or apps that show fake profits and block withdrawals once money is deposited.  

Social media and influencer scams

Ads or posts promising easy returns, often using paid influencers, fake endorsements or impersonation.  

Wallet and account takeovers

Phishing emails, fake apps or messages designed to steal login details or private keys.  

Romance and “confidence‑building” scams

Scammers build relationships over time before encouraging victims to invest in fake crypto opportunities.  

Pyramid and recruitment‑based schemes

Promises of high returns linked to recruiting others. Pyramid schemes are illegal in Ireland. 

Fake Initial Coin Offerings (ICOs) and “new coin” launches

Scammers promote a brand‑new token or ICO with promises of high, guaranteed returns, flashy websites and fabricated endorsements. Once money is sent, the token may never launch, withdrawals are blocked, or the site disappears. ICOs are unregulated in many cases and can be used to defraud investors, so treat new‑coin promotions with extreme caution; check the issuer, avoid pressure to invest quickly and never rely on celebrity or social‑media endorsements. 

Watch this video on crypto scams

Types of crypto-assets

The word crypto comes from cryptography, which means using technology to keep information secure. Crypto-assets exist only in digital form. Ownership and transactions are recorded on a blockchain, a shared digital record copied across many computers around the world. While the blockchain network itself is usually decentralised, some crypto-assets can be issued and managed by a single organisation. 

Although blockchain technology is designed to be secure, problems can still happen in the apps, platforms or digital wallets people use to store and trade crypto-assets. 

Some crypto-assets can be used to pay for goods or services, but only where a seller agrees to accept them. In practice, many people buy crypto mainly as a speculative investment, meaning they hope to sell it later at a higher price. This can involve significant risk, as prices can change quickly and suddenly. 

This section explains the main types of crypto-assets and highlights key differences between more regulated products, such as e‑money tokens and riskier forms of crypto. 

There are three big categories of crypto-assets: 

• E–Money Tokens (EMTs) 
• Asset–Reference Tokens (ARTs) 
• Other crypto-assets (utility tokens, NFTs, crypto, etc.) 

E‑money tokens (EMTs) and asset‑referenced tokens (ARTs) are often called stablecoins. They are designed to keep a steady value by being linked to another asset, such as a currency like the euro or a commodity like gold, unlike more volatile crypto-assets such as Bitcoin. 

However, this does not guarantee that you will get all your money back. Stablecoins can still lose value, and problems in the market, poor management, or the failure of the provider could lead to partial or total loss. 

E–Money Tokens (EMTs)

Electronic Money Tokens (EMTs) are a category of crypto-assets defined in European regulation as tokens that aim to keep a stable value by linking to a single official fiat currency, such as the euro. A fiat currency is government–issued money that is not backed by gold or any other physical commodity; instead, its value comes from people’s trust in the stability and authority of the government or central bank that issues it.  

This is very different from most crypto, which anyone can create and which usually aren’t backed by real money. EMTs must always be redeemable at their full value – one token should equal one unit of the currency it is linked to – although the price may move up or down when traded on exchanges.  Because the issuer is legally responsible for the token and must hold enough reserves to support it, EMTs are considered centralised: one regulated company issues the tokens and guarantees their value. 

Because EMTs are stable and tightly regulated, they can be suitable for everyday uses like payments, sending money abroad and storing funds in digital wallets. European regulation treats them much like traditional electronic money, which means stronger consumer protection and closer supervision than most other crypto-assets. While crypto such as Bitcoin can rise or fall sharply in price, EMTs are designed to stay steady, making them a practical link between regular banking and blockchain‑based payments.  

Asset–Reference Tokens (ARTs)

Asset‑Referenced Tokens (ARTs) are a type of crypto‑asset that try to keep a stable value by linking to several different assets, such as gold, a mix of currencies or other crypto‑assets. This makes them different from tokens that are tied to just one currency.  

If you own an ART, you can ask the issuer to redeem it. They must give you the market value of the assets the token is linked to, or in some cases the assets themselves. 

Other crypto-assets

• This category includes crypto-assets that are not EMTs or ARTs and are not considered a financial instrument. In this group, only utility tokens are regulated in the European Union. 
• A utility token is a type of crypto asset that gives you access to a specific product or service, usually from the company that issued the token. Think of it like a digital voucher or ticket, used for things like platform access, discounts or special features. 
• Under EU rules, issuers of utility tokens must publish a detailed crypto‑asset “white paper” (a prospectus of the project), but there is no formal approval or supervision process by regulators.  
• You may have read about non-fungible tokens (NFTs). They are unique digital tokens recorded on a blockchain. They are often used to show ownership or authenticity of items such as digital artwork or in–game objects, and they can be bought and sold on online NFT marketplaces. It is worth noting that buying an NFT of artwork does not usually give you the right to copy, sell or commercially use the image, unless this is clearly stated. Under EU rules, NFTs that are genuinely unique are generally not regulated.

Is crypto regulated in the European Union? 

The Markets in Crypto‑Assets Regulation (MiCAR/MiCA) is the EU’s single rulebook for some crypto‑assets and for Crypto‑Asset Service Providers (CASPs). It applies across all 27 EU countries, Ireland included, since 2024.  

Under MiCAR, firms that issue certain types of crypto‑assets or provide crypto‑asset services in the EU generally need to be authorised and supervised by their national regulator. In Ireland, this is the Central Bank of Ireland. It authorises and supervises CASPs and enforces the MiCAR rules. 

The regulation introduces rules on governance, disclosures, safeguarding client assets, conduct, and preventing market abuse.  It also creates a common EU framework for activities that were not previously covered by financial law, including the issuance, custody, and administration of crypto‑assets, and the operation of trading platforms and exchanges where users can buy, sell or trade crypto against fiat currencies or other crypto‑assets.

MiCAR covers: 

• E‑Money Tokens (EMTs) and Asset‑Referenced Tokens (ARTs) – stablecoins.  
• Other crypto‑assets (e.g., utility tokens) that are not EMTs or ARTs and are not financial instruments. 
• Crypto‑Asset Service Providers (CASPs) offering services such as custody, operating trading platforms, exchange (crypto/fiat or crypto/crypto), execution of orders, placing, reception and transmission of orders, transfer services, advice and portfolio management on crypto‑assets. These services require authorisation before going live.  

MiCAR aims to make crypto markets safer and more transparent, but crypto‑assets remain risky and speculative. Even with regulation, you can lose money. Crypto holdings are NOT protected by safeguards that apply to traditional deposits and investments (for example, Deposit Guarantee Scheme or Investor Compensation Scheme do not apply to crypto). 

Your options for investing in crypto

Mining

Using computing power to validate transactions on a blockchain. Successful miners may receive newly created coins as rewards. This option is generally suited to advanced users, as it requires specialised equipment, high electricity costs, technical setup and ongoing monitoring. Beginners often underestimate the complexity, costs and profitability risks. 

Buying through a crypto provider

Buying crypto through a broker or platform is the most common and simplest way for beginners to get started. Choosing a MiCAR‑authorised Crypto‑Asset Service Provider (CASP) operating in the EU and supervised in Ireland by the Central Bank adds an extra layer of oversight and consumer protection. 

Receiving crypto as payment

You can receive crypto in exchange for goods or services. This can be straightforward for personal use, but you must understand how your digital wallet works. If you lose access to your wallet or private keys, you may permanently lose your crypto. 

Trading on a crypto exchange

You can swap one crypto asset for another or convert crypto to traditional money such as euro. Trading exposes you to market volatility and is generally more suitable for intermediate or advanced users. Simple buy and sell actions are accessible to beginners, but active trading requires experience and risk awareness. 

These activities are provided through different types of platforms, and one platform can often offer more than one service.

For example: 

• If you are buying or selling crypto, you are usually using a crypto exchange. 
• If you are storing or managing crypto, you may be using a crypto-asset platform or wallet service. 
• If you are trading directly from one wallet to another without a company in between, you are using a decentralised platform (DeFi), which is generally more complex and better suited to experienced users. 

Understanding what a platform is designed for helps you choose one that matches your experience level and your goals. 

What to consider before you decide

Crypto as a payment method

Crypto can be used to pay for goods or services by sending it directly from one digital wallet to another. However, it is not widely accepted as a payment method in Ireland. Crypto is not legal tender, which means businesses are not required to accept it.

While some online shops and a small number of businesses may accept crypto, its use for everyday payments remains limited. The Central Bank of Ireland also warns that crypto is volatile and risky, which makes it less suitable for routine spending compared to traditional payment methods. 

Crypto as an investment

Crypto‑asset service providers can be regulated or unregulated. If you decide to invest in this complex market, choose MiCAR‑authorised providers whenever possible, because these firms must meet EU standards for consumer protection, governance, and security. 

• Check whether the provider is authorised under MiCAR in Ireland: exchanges, custodians and other crypto‑asset service providers (CASPs) must be authorised to operate in the EU. You can verify this using the Central Bank of Ireland’s Register of Crypto-Assets Service Provider (MiCAR). 
• Check the website of the European Securities and Markets Authority (ESMA), which keeps the official EU registers for authorised crypto‑asset service providers (CASPs), issuers of Asset‑Referenced Tokens (ARTs) and E‑Money Tokens (EMTs), and white papers for other crypto‑assets.  

Be aware of the fees, charges, and taxes involved

• Transaction fees apply when buying, selling or transferring crypto. Exchanges and platforms may charge trading fees, spreads, network fees, or deposit/withdrawal fees. Fee structures vary widely by exchange. 
• Revenue treats crypto like other investments and has published a Guide to taxation of crypto assets. 
• If you make a profit from selling crypto, you must declare it for Capital Gains Tax. 
• If you receive crypto as a gift or inheritance, you must report the asset description, sale proceeds and acquisition cost to Revenue for Capital Acquisitions Tax. 

A digital wallet

A digital wallet stores the keys that let you access your crypto, which always sits on the blockchain. The wallet holds a public key (like an account number that others use to send you crypto) and a private key (a secret code that proves the crypto at your address belongs to you and authorises you to move it). If you lose the private key, no one – not the platform, not the regulator – can recover it, and your crypto is gone permanently.  

There are two main types of digital wallets used to hold crypto‑assets: 

Hosted (custodial) wallets

The wallet is provided and managed by a company, such as a crypto exchange. The company looks after the private keys and security for you. This is usually simpler for beginners, but you must trust the provider. 

Unhosted (self‑custody) wallets

You control the wallet yourself, using an app or a physical device. You hold the private keys and are fully responsible for security and backups. This gives you more control but also more responsibility and is generally better suited to experienced users. 

Major risk: no safety net

Do not assume the same protections apply as with banks or investments. Crypto‑assets are outside the Deposit Guarantee Scheme and the Investor Compensation Scheme, so losses are not covered and are usually permanent.  

Quick checklist before getting involved

Before buying, trading or using crypto, consider: 

• Can I afford to lose all this money? 
• Do I fully understand the product and how it works? 
• Is the provider authorised under the European regulation (MiCAR)? 
• Am I being pressured to act quickly or promised guaranteed returns? 

If the answer to any of these raises concern, it may be safer to step back.