The Financial Conduct Authority (FCA) warned investors on Monday they should be prepared to lose "all their money" if they choose to invest in cryptocurrency products offering high returns.
- The U.K. financial regulator said consumers should make sure they understand what they are investing in and the associated risks, as they would 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 warned there is significant price volatility in crypto assets and it can be hard to value crypto assets reliably, which places consumers at a high risk of losses.
- 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.
- The FCA's ban on the sale of cryptocurrency derivatives and exchange-traded notes – brought in as a consumer protection – went into effect on Jan. 6.
The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups. As part of their compensation, certain CoinDesk employees, including editorial employees, may receive exposure to DCG equity in the form of stock appreciation rights, which vest over a multi-year period. CoinDesk journalists are not allowed to purchase stock outright in DCG.
Learn more about Consensus 2023, CoinDesk’s longest-running and most influential event that brings together all sides of crypto, blockchain and Web3. Head to consensus.coindesk.com to register and buy your pass now.