The UK’s financial regulator, Financial Conduct Authority, issued a warning about cryptocurrency investments as a major crash in the cryptocurrency markets continues.
FCA: “Crypto investors should be prepared to lose all their money.”
FCA made a statement on January 11, stating that crypto investment and lending are associated with a high level of risk, emphasizing that investors should be prepared to lose all their money when investing in crypto.
Referring to a number of risks such as price volatility, product complexity, and fees, FCA said investors are responsible for crypto-related risks:
Consumers should be aware of the risks and fully consider whether it is appropriate for them to invest in high-return investments based on crypto assets. They should check and carefully evaluate the relevant crypto asset business.
“If things do not go well, you may not be able to claim your rights”
The regulator also noted that crypto investors are unlikely to access major consumer protection agencies such as the Financial Ombudsman Service or the Financial Services Compensation Scheme if something goes wrong.
The FCA stated that companies providing crypto-related services must ensure they comply with all relevant legal requirements and are authorized by the FCA. The agency stated that as of January 10, 2021, all UK-based crypto asset firms must be registered with the FCA under anti-money laundering regulations. FCA says, “Operating without registration is a criminal offense.” used the expression.
The market is collapsing
The FCA’s crypto alert came amid a massive drop in crypto markets after Bitcoin (BTC) recorded an all-time high of about $ 42,000 on January 8. On January 11, BTC fell below the $ 33,000 threshold for a short time. Currently, BTC is trading around $ 35,000, down 14% in the past 24 hours.
This latest crypto market crash was not limited to Bitcoin. The top 10 cryptocurrencies by market cap suffered huge losses, and altcoins like Ethereum (ETH) dropped about 19%.