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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, 10:54 a.m. Published Jan 11, 2021, 10:22 a.m.

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.

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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.

FCA Regulation U.K

Tanzeel Akhtar

Tanzeel Akhtar has contributed to The Wall Street Journal, BBC, Bloomberg, CNBC, Forbes Africa, Financial Times, The Street, Citywire, Investing.com, Euromoney, Yahoo! Finance, Benzinga, Kitco News, African Business Magazine, Hedge Week, Campden Family Office, Modern Investor, Spear's Wealth Management Magazine, Global Investor, ETF.com, ETF Stream, CIO UK, Funds Global Asia, Portfolio Institutional, Interactive Investor, Bitcoin Magazine, CryptoNews.com, Bitcoin.com, The Local, The Next Web, Mining Journal, Money Marketing, Marketing Week and more. Tanzeel trained as a foreign correspondent at the University of Helsinki, Finland and newspaper journalist at the University of Central Lancashire, UK. She holds a BA (Honours) in English Literature from the Manchester Metropolitan University, UK and completed a semester abroad as an ERASMUS student at the National and Kapodistrian University of Athens, Greece. She is NCTJ Qualified - Media Law, Public Administration and passed the Shorthand 100WPM with distinction. She does not currently hold value in any digital currencies or projects.