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."

AccessTimeIconJan 11, 2021 at 10:22 a.m. UTC
Updated Sep 14, 2021 at 10:54 a.m. UTC

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.

Read more about

DISCLOSURE

Please note that our privacy policy, terms of use, cookies, and do not sell my personal information has been updated.

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.

Trending

1
CoinDesk - Unknown
NFT Platforms Should Be Caught by EU Money-Laundering Overhaul, Lawmakers Say

Unhosted wallets and decentralized finance were left largely unscathed by two landmark crypto laws agreed to last week, but left-wing lawmakers may seek another go as they discuss dirty-money rules.

CoinDesk - Unknown
2
CoinDesk - Unknown
Bitcoin se recupera y supera los $19K; Nomura advierte de una recesión en EE. UU. y Reino Unido

Nomura escribió acerca de una recesión en la eurozona, el Reino Unido y Asia Pacífico, lo que podría influir en los precios de las criptomonedas.

CoinDesk - Unknown
3
CoinDesk - Unknown
Argentinos se refugian en stablecoins durante el fin de semana tras dimisión del ministro de Economía

Los principales exchanges del país informaron que los usuarios compraron hasta tres veces más criptomonedas estables que durante un fin de semana normal, en medio una crisis económica en ciernes.

CoinDesk - Unknown
4
CoinDesk - Unknown
Polkadot Builder Parity Technologies Adds 3 Execs to Leadership Team

The new executives joining Parity are Eran Barak (COO), Peter Ruchatz (CMO) and Fahmi Syed (CFO)

CoinDesk - Unknown