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The Central Bank of Ireland has stated that it is unlikely to approve investment funds for retail crypto investors because they lack the know-how to navigate the high-risk asset class.

The February 2022 report Securities Markets Risk Outlook Report: A Changing Landscape described crypto assets as a new product offering in securities markets that is complex and a “potential threat to investor protection.”

Although the bank fielded many queries last year about Alternative Investment Funds (AIF) regarding crypto, it is now not expected to approve an AIF for retail crypto investors. The bank feels that such investments “may be suitable for wholesale or professional investors,” but are too complicated for small fish:

“The Central Bank is highly unlikely to approve a UCITS or a Retail Investor AIF proposing any exposure to crypto-assets, taking into account the specific risks attached to crypto-assets and the possibility that appropriate risk assessment could be difficult for a retail investor without a high degree of expertise.”

A UCITS is an Undertaking for the Collective Investment of Transferable Securities which is used in the European Union (EU) as a regulatory framework for managing certain investments for sale across the EU.

Ireland’s Director of securities and markets supervision Patricia Dunne provided some explanation of the bank’s thinking to Bloomberg on Feb. 8, saying there are “too many unanswered questions around things like custody, money laundering, and even just volatility and liquidity” regarding retail crypto investing.

Related: US lawmaker pushes for state-level regulations on stablecoins at hearing on digital assets

Regulatory attitudes to crypto in the nearby U.K. aren’t much more favorable with Her Majesty’s Revenue and Customs (HMRC) laying out strict new guidelines for DeFi taxation recently. There, returns made on crypto earned through staking are considered property, and thus subject to capital gains tax.

Yesterday, Russia’s government agreed on a regulatory scheme which will allow residents to trade crypto. Crypto will be treated as an “analogue of currencies” rather than a currency itself, and any transaction with a value greater than about $8,000 must be declared.