Crypto apps are not yet tailored to customers’ interests

 

Steering in crypto apps may lead to more frequent and riskier trading activities

In 2023, the AFM conducted an exploratory study into the choice environment in the apps of three Dutch crypto-asset service providers, who jointly serve the majority of Dutch crypto owners. For comparison purposes, the study also included a foreign provider. The exploratory study focused on the presence of elements in crypto apps that may guide and influence decision-making. The purpose of this was to identify potential risks for consumers.

The apps of all three service providers offer easy access to the crypto market and encourage current users to invite their friends to join the apps. This entails the risk that consumers for whom crypto is not a suitable product will also enter the crypto market. Mechanisms in the apps guide users in different ways. This is done both towards making quick and easy purchases and towards trading in specific crypto tokens or activating additional services. This creates the risk that consumers make decisions that are not in their own interests. Users are also encouraged to trade more often by monitoring their crypto real time and to continue to be active in the app. This may entail the risk that consumers will trade more frequently than they had originally planned.

Call for the crypto sector: focus on the interest of the customer

Currently, the AFM does not yet have a mandate that allows it to supervise crypto-asset service providers. As from December 2024, the Markets in Crypto-Assets Regulation (MiCAR)
will provide the AFM with tools to address some of the risks for consumers in the crypto market. However, not all risks will be solved with the entry into force of MiCAR. Under MiCAR, the AFM will have a very limited ability to prevent crypto apps from steering customers towards behaviour that is not in their best interest. The AFM therefore encourages crypto-asset service providers to work on the maturity of their sector and to better tailor the choice environment of their apps to their customers’ interests.

It remains important that consumers active in the crypto market continue to be vigilant themselves. Even under MiCAR, crypto assets will continue to be high-risk products that seem to be suitable for only a very small group.

The AFM will initiate debate about the online choice environment of crypto apps in Europe

The AFM will share this report with other European supervisors and policymakers to raise awareness of the importance of carefully designed choice environments in crypto apps. The AFM will stimulate the conversation about this topic in the run-up to the evaluation of MiCAR and its expansion.

 

More information

RIsk in the choice environment of crypto apps (pdf, 1 MB)