Bitcoin: be prepared to lose all your money, FCA warns consumers

SourceThe Guardian
CountryMiddle east

Consumers should be prepared to “lose all their money” if they invest in schemes promising high returns from digital currencies such as bitcoin, the City watchdog has warned. The volatile nature of cryptoassets was highlighted again on Monday as bitcoin dropped nearly 25% from Friday’s record high of $42,000, having doubled its value in less than a month. Despite the day’s decline to below $32,000, bitcoin is still only at its lowest level since last Tuesday. As the popularity of crytocurrencies grows, the Financial Conduct Authority urged consumers to understand what they were investing in and the financial risks involved, given they were unlikely to be protected by UK schemes that help investors reclaim cash when companies go bust. The FCA said some crypto investment firms may be overstating potential payouts, or understating the risks. “The FCA is aware that some firms are offering investments in cryptoassets, or lending or investments linked to cryptoassets, that promise high returns,” the regulator said on Monday. “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,.” Investors who found themselves out of pocket more...