UK's FCA Warns Investors of High-Risk Crypto Investments and Scams
The Financial Conduct Authority said investors in cryptocurrency products offering high returns should be prepared to lose "all their money."
Updated Sep 14, 2021 at 10:54 a.m. UTC
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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.