The UK-based watchdog is pleading with consumers to be aware of crypto-investment companies enticing people with false-high profits promises. FCA shed light on such Ponzi schemes and encourages investors to do in-depth uncovering research before they settle on investing in any cryptoasset. The watchdog also says that crypto-investment enthusiasts should always be ready to count losses if they decide to invest in such assets.
According to the FCA, cryptoassets are not really under any investment regulations. Therefore, any investment made in them could result in high profits or deafening losses. They strongly suggest companies that boast of high returns are highly likely to be fraudsters and scammers.
FCA’s Concern in Cryptoassets Investments
The financial regulatory body has aired very undeniable reasons that investors should consider when it comes to the cryptocurrency investment universe. The FCA website clearly states that cryptoasset-related investments are not protected by the Financial Services Compensation Scheme(FSCS). The scheme is meant to protect other financial assets such as shares and fiat currencies kept in banks.
The Financial Ombudsman Service(FOS) is also present under the FCA but is not available in cryptoasset investment. The two significant services, being unavailable for investors looking at the lucrative cryptocurrency highs, spells doom when things eventually go wrong. When a dispute arises or the assets are stolen, there is no mediator to help solve the issue, and investors will get little to no compensation for their losses.
The FCA has been raising awareness on firms that have not registered with them under money-laundering regulation terms. If consumers are lured into blindly purchasing cryptocurrency products from search firms, they are likely getting robbed of their funds.
Bitcoin, the world’s most known cryptocurrency, has recently been on a bullish wave, hitting an all time high of $40K. However, all cryptocurrencies like BTC have highly volatile prices; their prices can drop significantly in seconds. Hence, the price volatility of cryptoassets is a big sign that getting guaranteed high returns is a lie served hot.
The UK Watchdog’s Sternly Given Advice
FCA urges cryptocurrency investors to counter check all firms advertising cryptoasset investment returns if they are present in the Financial Services Register or list of firms getting vetted by them. They should also note that a temporary listing does not necessarily mean it is safe to invest in the firm. If both of the mentioned cases are not in play, investors should ask whether they are legally operating without FCA’s registration.Upon finding out the company is not operating under any known legal parameters, they should promptly withdraw all their cryptoassets or any currency from the firm. For more info on how to avoid such schemes, they should take their time to visit the FCA’s ScamSmart pages.