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.

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