The Financial Conduct Authority (FCA) has issued a warning to potential investors in crypto assets – virtual currency – such as Bitcoin. Crypto means secret so its not surprising that this form of currency is often synonymous with links to criminal activity, but its legitimate use is nevertheless on the rise.
• High returns may not be subject to regulation beyond anti-money laundering requirements
• Price volatility places consumers at risk
• The complexity of some products can make it hard for consumers to understand the risks.
• There is no guarantee that investments can be converted back into cash
• Fees and charges may be more than those for regulated investment products
• Firms may overstate the returns of products or understate the risks involved
• Investors in cryptoassets are also unlikely to be able to access the Financial Ombudsman Service (FOS) or the Financial Services Compensation Scheme.