The European Securities and Markets Authority (ESMA) has warned that crypto will increasingly threaten traditional financial markets’ stability as the industry grows and becomes more entwined with traditional finance players.

“We cannot rule out that future sharp drops in crypto prices could have knock-on effects on our financial system,” ESMA’s executive director Natasha Cazenave said in an April 8 statement to the Economic and Monetary Affairs Committee.

Cazenave noted, however, that crypto currently only accounts for 1% of global financial assets and is not yet significant enough to cause major “spillover effects” into traditional financial markets.

She warned that interconnections between crypto and traditional markets are rapidly growing — particularly in the more crypto-friendly US — and called for closer monitoring.

“Crypto-assets markets evolve quickly, in an often unpredictable manner, and we need to keep a close eye on these developments,” Cazenave said, adding:

“Turmoil, even in small markets, can originate or catalyze broader stability issues in our financial system.”

Cazenave’s concerns ranged from spot crypto exchange-traded funds and stablecoin use to hacks, scams and scandals — highlighting the recent $1.4 billion Bybit exploit and FTX’s collapse in November 2022.

Today in the ECON Committee, the role of crypto assets in relation to financial market stability was discussed. The European Central Bank (ECB) and the European Securities and Markets Authority (ESMA) were present.

I raised a critical question about the digital euro.… pic.twitter.com/KST7FRBhFF

— Engin Eroglu (@EnginEroglu_FW) April 8, 2025

The European Union has already implemented several measures to safeguard against crypto risks, most notably the Markets in Crypto-Assets (MiCA) regulation that was rolled out last year.

While Cazenave said MiCA marked a “breakthrough” for crypto regulation, she added that there is “no such thing as a safe crypto-asset” and that more rules may need to be implemented to mitigate future risks.

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Her comments come as both crypto and the stock markets have experienced double-digit falls over the last few weeks as the Trump administration continues to follow through on its tariff plans.

Europe lags US in crypto adoption

While crypto adoption has accelerated in the US, Cazenave noted that over 95% of European banks remain on the sidelines, with no involvement in crypto-related activities.

However, retail participation is on the rise, with an estimated 10% to 20% of European investors having crypto exposure, which is in line with growing global interest, Cazenave said.

Most reports measuring US crypto adoption suggest that the range of adoption is between 15% and 28% of the population.

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Former NBA star Shaquille O’Neal has been granted final court approval to settle a class-action lawsuit for $11 million with Astrals non-fungible token (NFT) buyers.

Florida federal court judge Federico Moreno granted approval of the settlement between O’Neal and the class group led by Daniel Harper in an April 1 order made available on April 8.

The deal created a fund of up to $11 million for eligible class members and awarded $2.9 million in attorney fees and costs. All those who purchased Astrals NFTs from May 2022 to Jan. 15 and those who purchased the project’s native GLXY tokens up until mid-January are eligible. 

“The fee sought by lead class counsel has been reviewed and approved as fair and reasonable by plaintiffs,” Moreno’s order read.

O’Neal was hit with the lawsuit in May 2023 over his founding and promotion of the Solana-based Astrals NFT project, which the suit claimed was an “offer and sale of unregistered securities.”

The class group said they bought Astrals NFTs and “suffered investment losses” due to O’Neal’s “conduct” in promoting the project.

In August, Judge Moreno recognized that the class suit had alleged that the former NBA player was a seller of the NFTs. O’Neal agreed to the settlement in November.

NFT sales slump

The Astrals NFT collection consisted of 10,000 unique 3D digital collectibles created in April 2022 by the artist Damien Guimoneau in a Solana-based project that promoted a virtual world where users could socialize and play with others, including the basketball star. 

Related: NFT sales plunge 63% in Q1, but Pudgy Penguins, Doodles buck trend 

There has been no activity or sales from the collection for the past two years, according to NFT marketplace OpenSea. 

Overall, NFT sales are still in deep bear market territory, with just $27 million sold as of April 7, down from more than $2 billion per week at the end of 2021, according to CryptoSlam.

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