The Financial Conduct Authority (FCA) warns that investing in crypto assets carries high risks. Investors “should be prepared to lose all their money,” the statement said.
The UK regulator is worried about high-yield cryptocurrency and derivatives related offers. FCA points to:
- Limited ability to protect consumers. Investors have a low chance of receiving compensation.
- High volatility of crypto assets.
- The complexity of the products offered.
- Potential hidden fees and commissions.
- Misleading marketing materials.
Firms offering cryptocurrency products are advised to ensure that they comply with all applicable regulatory requirements and have the necessary authorization.
As a reminder, from January 10, 2021, all UK companies working with crypto assets must register with the FCA in accordance with the anti-money laundering regulations.
On January 6, a ban on the sale of cryptocurrency derivatives to retail investors came into effect in the UK.