The Financial Conduct Authority has warned the public about crypto investment as Bitcoin dove below $33,000.
The United Kingdom’s financial regulator, the Financial Conduct Authority, has posted a warning about cryptocurrency investment amid a major crash on crypto markets.
In a Jan. 11 statement, the FCA said that crypto investment and lending are associated with a high level of risk, stressing that investors should be ready to lose all their money while investing in crypto.
Citing a number of risks including price volatility, product complexity, and charges and fees, the FCA said that investors are taking charge of crypto-associated risks:
“Consumers should be aware of the risks and fully consider whether investing in high-return investments based on cryptoassets is appropriate for them. They should check and carefully consider the cryptoasset 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 noted that companies offering crypto-related services should make sure that they comply with all relevant regulatory requirements and are authorized by the FCA. Starting from Jan. 10, 2021, all United Kingdom-based crypto asset firms must be registered with the FCA under regulations to tackle money laundering, the agency wrote. “Operating without a registration is a criminal offence,” the FCA added.
The FCA’s crypto warning comes amid a major drop on crypto markets after Bitcoin (BTC) recorded its new all-time high of nearly $42,000 on Jan. 8. On Jan. 11, BTC saw a massive selloff, briefly diving below the $33,000 threshold. As of publishing time, BTC is trading around $35,000, down about 14% over 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 top-10 cryptos by market cap have posted major losses, with altcoins like Ether (ETH) dropping nearly 19%.