UK FCA Issues New Reminder about the Risks of Investing in Cryptos

The UK’s Financial Conduct Authority (FCA Financial Conduct Authority (FCA) The Financial Conduct Authority (FCA) is the largest financial regulator for all financial markets in the United Kingdom (UK).The UK regulator is responsible for the conduct of firms authorized under the Financial Services and Markets Act 2000. Moreover, the FCA is also responsible for the regulation of behavior in retail and wholesale financial markets, supervision of the trading infrastructure that supports those markets, and the prudential regulation of firms not regulated by the PRA. Its rol The Financial Conduct Authority (FCA) is the largest financial regulator for all financial markets in the United Kingdom (UK).The UK regulator is responsible for the conduct of firms authorized under the Financial Services and Markets Act 2000. Moreover, the FCA is also responsible for the regulation of behavior in retail and wholesale financial markets, supervision of the trading infrastructure that supports those markets, and the prudential regulation of firms not regulated by the PRA. Its rol Read this Term) issued another reminder to warn consumers about the risks of investing in cryptocurrencies. In the advisory, the watchdog raised concerns about some social media posts promoting crypto assets and non-fungible tokens (NFTs), although it clarified that comments on individual products could not be made.

“(…) the FCA has not been given regulatory oversight over direct investments in crypto assets and NFTs. There are no consumer protections for those who buy any crypto assets and NFTs, and they are not FSCS protected. As a result, if you buy crypto assets you should be prepared to lose all the money you invest,” the British authority warned.

In addition, the FCA stated that those marketing crypto assets must adhere to the guidelines set by the Advertising Standards Authority (ASA) and state that they do not regulate crypto assets. The marketing of crypto assets must also make it clear that financial compensation schemes do not cover them, the authority pointed out. Moreover, adverts for cryptocurrencies have been investigated by the ASA because they failed to make it clear that the product is not regulated or protected in the UK.

2021 Warning

In a previous advisory published last year, the FCA noted: “The FCA is aware that some firms are offering investments in crypto assets, or lending or investments linked to crypto assets, that promise high returns. Investing in crypto assets, 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.”

All UK crypto-asset companies have been required to register with the FCA since 10 January 2021 under money laundering Money Laundering Money laundering is a blanket term to describe the process by which criminals disguise the original ownership and proceeds of criminal conduct by making such proceeds appear to be derived from a legitimate source.Money laundering is an issue that traverses countless industries and sectors, which includes the financial services space. Though criminal money may be successfully laundered without the assistance of the financial sector, billions of dollars’ worth of criminally derived money are laund Money laundering is a blanket term to describe the process by which criminals disguise the original ownership and proceeds of criminal conduct by making such proceeds appear to be derived from a legitimate source.Money laundering is an issue that traverses countless industries and sectors, which includes the financial services space. Though criminal money may be successfully laundered without the assistance of the financial sector, billions of dollars’ worth of criminally derived money are laund Read this Term regulations. Not registering can lead to criminal prosecution. “Consumers should be aware of the risks and fully consider whether investing in high-return investments based on crypto assets is appropriate for them. They should check and carefully consider the crypto-asset business involved,” it added at that time.