The United Kingdom’s financial regulator, the Financial Conduct Authority, has posted a warning about cryptocurrency investments amid a major crash in crypto markets.
In a January 11 statement, the FCA said that crypto investments and loans come with a high level of risk, and stressed that investors should be willing to lose all their money while investing in crypto.
Referring to a number of risks, including price volatility, product complexity, and costs and fees, the FCA said investors are taking charge of cryptocurrency-related risks:
“Consumers should be aware of the risks and fully consider whether investing in high-return investments based on crypto assets is right for them. They must monitor and carefully consider the cryptoasset activities involved. “
The regulator also stated that crypto investors are unlikely to have access to major consumer protection agencies such as the Financial Ombudsman Service or the Financial Services Compensation Scheme if things go wrong.
The FCA noted that companies offering crypto-related services must ensure that they comply with all relevant legal requirements and are authorized by the FCA. As of January 10, 2021, all UK-based crypto asset companies must be registered with the FCA under the regulations to address money laundering, the agency wrote. “Working without registration is a criminal offense,” the FCA added.
The FCA’s crypto warning comes amid a major drop in crypto markets following Bitcoin (BTC) took his new record high of nearly $ 42,000 on January 8. On January 11, BTC saw a massive sell-off, which briefly dipped below the $ 33,000 threshold. From the publication time BTC trades $ 35, 000, have fallen about 14% in the past 24 hours, according to data from Cointelegraph’s Bitcoin Price Index.
The latest crypto market crash is not exclusive to Bitcoin, as all of the top 10 cryptos by market cap have suffered heavy losses, with altcoins such as Ether (ETH) by almost 19%.