Cryptoassets: Get Ready To Lose All Your Money

source: bbc
43

The Financial Conduct Authority (FCA) has issued a stark warning to investors in so-called cryptoassets. Many cryptoassets are not covered by investment regulation or protection. The warning is the latest in a string from the FCA and comes as Bitcoin, the best-known crypto currency, hits record highs. Some firms are drumming up new business by promising high returns for the investment. Last week, the price of Bitcoin, which has been in existence for 12 years, soared to over $40,000 - just short of £30,000. Its eye-catching swings in price have drawn in scores of investors. The FCA is concerned that while the highs are attractive, the inherent volatility of Bitcoin, and its rivals, mean there is a high risk of losses. It also means they can be difficult to understand and convert back to cash, and, unlike other forms of investment, such products have no associated tangible asset value. 'Very high risk' The FCA warns cryptoasset investors they will not have access to the Financial Services Compensation Scheme or the Financial Ombudsman Service as they would if they invested in standard products, such as shares. It said in a statement: "Investing in cryptoassets, or investments and lending linked to them, generally involves taking very high risks with investors' money. "If consumers invest in these types of product, they should be prepared to lose all their money." It said consumers should be wary if they're contacted out of the blue, pressured to invest quickly or promised returns that sound too good to be true and advises potential investors to visit its ScamSmart pages for more information on how to protect against fraud. At the very least, it says investors should check the firm itself is registered with the FCA for anti money laundering. Laith Khalaf, a financial analyst at AJ Bell, said: "The regulator is clearly concerned that the high risks already inherent in cryptoassets are being compounded by scam activity, as well as unregulated firms targeting consumers with marketing material that highlights the rewards, but not the potential downside, of investing in cryptoassets. "Unfortunately Bitcoin and other cryptoassets are subject to dramatic price falls as well as rises. Consumers should be on high alert for unsolicited communications linked to Bitcoin or other cryptocurrencies and should consider any marketing material with an extremely critical eye."

NB: Stories are shared by community members. The article does NOT represent the official view of NaijaWorld and the author is SOLELY RESPONSIBLE for this article
Comments

About Us
You can follow any community you find interesting, get your news, ask for advice, discuss sports, and voice your opinion. Upload photos, contribute stories, join discussions, and help other people find the best stories, videos, pics, games, and news by upvoting and downvoting posts. Share and discuss posts with other naijaworlders.
Related Stories
APC Will Teach Foreign Nations How To Play Politics
Wike To APC, Grow Above Politics Of Bitterness
On ASUU, Endsars,trump And The Game Of Politics.
Opposition Playing Politics With Amotekun Initiative-oyo PDP
APC Will Soon Be Africa’s Largest Political Party
Governor Yahaya Bello Was Not Lucky, But Chosen
Oyo PDP, APC Trade Blames Over Insecurity, Fake Amotekun Uniform
Pathetic State Of Schools In Akwa Ibom
Farmers WAKEUP
Updated Uganda Election Results Of Museveni Vs Bobi Wine