FCA Crypto Warning: Prepare To Lose All Your Money


The Financial Conduct Authority (FCA) warned markets and consumers again one day after new regulations came into effect regarding cryptocurrencies, requiring cryptocurrency companies to comply with anti-money laundering regulations.

In a statement released in the markets this morning, the regulator said consumers should be ready to lose all of their money investing in crypto products.

“The FCA is aware that some companies are offering investments in cryptoassets or loans or investments related to cryptoassets that promise high returns,” said the City Watchdog.

“When you invest in crypto assets or related investments and loans, you are generally taking very high risks with investors’ money. When consumers invest in these types of products, they should be prepared to lose all of their money. “

The warning came after the price of Bitcoin fell around 20% from $ 40,000 to $ 32,000 overnight, before rebounding to around $ 35,400 at the time of writing.

The FCA added that consumers should be aware that they may not have recourse to the Financial Services Compensation Scheme (FSCS) or the Financial Ombudsman Service (FOS) if something goes wrong. A fraud warning also followed.

“With investments related to cryptoassets, consumers are unlikely to have access to the FOS or FSCS if something goes wrong.

“Consumers should be wary of being contacted out of the blue, pressured to invest quickly, or promised returns that sound too good to be true.” Visit the FCAs ScamSmart Pages for more information on how consumers should protect themselves from fraud. “

The warning follows a New Year’s surge in the price of Bitcoin, the leading cryptocurrency, amid signs that institutional investors are taking it seriously. Fund manager Ruffer surprised investors In December it was announced that 2.5% of its assets were invested in Bitcoin as an alternative to gold.

The FCA banned the sale of derivatives and exchange-traded debt securities that route certain types of cryptoassets to retail customers in India October 2020.

As of yesterday, all UK cryptoasset companies are required to register with the FCA in accordance with anti-money laundering regulations. Working without registration is a criminal offense.

The steps follow months of work investigating consumer risk in the industry. The FCA was already in February examined Sipp providers for example through their exposure to cryptocurrencies. A year earlier it had been looking for Advisors’ views to regulate crypto assets.

In a note accompanying the statement of prohibition, the FCA stated that it “considers these products unsuitable for retail consumers because of the harm they cause”.

It was also estimated that the ban itself would save around £ 53 million for consumers.

FCA Crypto Warning: Prepare To Lose All Your Money



Source link

Next Post

Leave a Reply

Your email address will not be published. Required fields are marked *

Recent News