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FCA warned of the risks of investing in cryptoassets

Amid the correction of cryptocurrency markets, the UK regulator warned consumers about the risks of investing in crypto assets and the likelihood of losing all invested money.

According to a statement on the website of the UK Financial Conduct Authority (FCA), some firms are offering investments in cryptoassets or lending services that promise high returns. According to the regulator, such investments “are usually associated with very high risks in relation to investors’ money. If consumers invest in these types of products, they must be prepared to lose all of their investment. ”

The FCA cautions that, as with all high-risk speculative investments, consumers must ensure they understand the risks associated with the investment and any applicable safeguards.

“Companies offering such products must comply with all applicable regulatory requirements and be approved by the FCA when required. As of 10 January 2021, all UK crypto-related companies must be registered with the FCA in accordance with anti-money laundering regulations. Working without registration is a criminal offense, ”the regulator notes.

FCA states that the main risks associated with investing in crypto assets include consumer protection concerns, price volatility, difficulty understanding how products work, high commissions and service fees, as well as marketing campaigns that do not fully reflect the essence of the product and lure investors with questionable scheme.

“Consumers need to be aware of the risks and take them into account when deciding whether to invest in high-yield cryptoasset investments. They should check and carefully study the business related to crypto assets, ”the regulator says.

Recall that last fall, the FCA decided to ban cryptocurrency derivatives, despite the disagreement of 97% of respondents, and at the end of December, the regulator established a temporary registration regime for cryptocurrency companies.

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