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The Financial Conduct Authority (FCA) warned investors on Monday if they choose to invest in cryptocurrency products offering high returns, they should be prepared to lose “all their money.”
- The U.K. financial regulator said that consumers should make sure they understand what they are investing in and the associated risks as 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 highlighted that there is significant price volatility in crypto assets and it can be hard to value crypto assets reliably – this places consumers at a high risk of losses, the watchdog said.
- 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.
- On Jan. 6, the FCA's ban on the sale of cryptocurrency derivatives and exchange-traded notes – brought in as a consumer protection – went into effect.
