FCA Warning For Cryptocurrency Investments
The FCA has issued another warning to the markets and consumers regarding cyrptocurrencies, a day after new rules came into force requiring cryptocurrency firms to comply with anti-money laundering rules.
The regulator advised customers in a statement that consumers of crypto products, should be prepared to lose all of their money. It is understood that the promised high returns for cryptoassets is indeering, but the FCA are sticking by their word in terms of the losses one can endure.
The statement outlined: ‘Investing in cryptoassets, or investments and lending linked to them, generally involves taking very high risks with investors’ money. If consumers invest in these types of product, they should be prepared to lose all their money.’
It has been outlined by the FCA, that if investments do fail, then one may not be able to fall back on the FSCS (Financial Services Compensation Scheme).
As of yesterday January 2021, it have been confirmed that all UK cryptoasset firms, must be registered with the FCA to tackle money laundering.
The investigation of consumer risk investments, began in February when SIPP providers when looked into over crypt exposure. The FCA concluded that these types of products are ill-suited for retail consumers due to the harm they pose. It was further estimated that consumers would be saved £53 million as a result of the ban itself.