UK’s FCA Warns Investors of High-Risk Crypto Investments and Scams
UK’s FCA Warns Investors of High-Risk Crypto Investments and Scams
The Financial Conduct Authority (FCA) warned investors on Monday if they choose to invest in cryptocurrency products offering high returns, they should be prepared to lose “all their money.”
- The U.K. financial regulator said that consumers should make sure they understand what they are investing in and the associated risks as with all high-risk and speculative investments.
- “Consumers should be wary if they’re contacted out of the blue, pressured to invest quickly, or promised returns that sound too good to be true,” said the FCA.
- The FCA also highlighted that there is significant price volatility in crypto assets and it can be hard to value crypto assets reliably – this places consumers at a high risk of losses, the watchdog said.
- Consumers for crypto asset-related investments are unlikely to have access to the Financial Ombudsman Service or the Financial Services Compensation Scheme if something goes wrong, the FCA added.
- On Jan. 6, the FCA’s ban on the sale of cryptocurrency derivatives and exchange-traded notes – brought in as a consumer protection – went into effect.
