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