The Financial Conduct Authority warned the public about crypto investment as Bitcoin dove below $33,000
In a statement today, the Financial Conduct Authority stated that investing and lending cryptocurrency has a high degree of risk. Accordingly, the UK’s financial regulator emphasizes that investors should be willing to lose all their money when investing in cryptocurrencies. This announcement comes amid a major crash in the crypto market.
Financial Conduct Authority has posted a warning about Bitcoin investments amid major crypto market crashes
Citing several risks including price volatility, product complexity, and charges, the FCA said investors are responsible for the risks associated with cryptocurrencies:
“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.”
The regulator also stated that crypto investors are unlikely to have access to major consumer protection institutions like the Financial Ombudsman Service or the Financial Services Compensation Scheme if something goes wrong.
The FCA notes that companies providing crypto-related services must ensure that they comply with all relevant regulatory requirements and are authorized by the FCA. Beginning January 10, 2021, all UK-based crypto asset companies must be registered with the FCA following the regulations to address money laundering.
The FCA added:
“Operating without a registration is a criminal offense.”
The FCA’s crypto warning comes amid a plunge in the crypto market after Bitcoin recorded a new all-time high of nearly $ 42,000 on Jan. 8. BTC witnessed a massive sell-off, shortly falling below the $ 33,000 threshold. As of press time, BTC is trading around $ 35,000, down about 14% over the past 24 hours. Parallel to Bitcoin, the entire cryptocurrency market also fell sharply. Among them, ETH has dropped 17% in the past 24 hours. But the heaviest losses are still Bitcoin SV and EOS, with a drop of more than 25% in the past 24 hours.
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