The UK’s financial regulator, the Financial Conduct Authority (FCA), has expanded its financial promotions regime to provide enhanced protections for UK users investing in cryptoassets. From 8 October 2023, all cryptoasset firms marketing to UK consumers, including prominent platforms like Coinbase, will have to comply with new regulations. This move aims to ensure that UK users are more informed about the risks involved in investing in cryptoassets.

Notice to Users in the UK:

Given the high-risk nature of cryptoasset investments, the Financial Conduct Authority (FCA) has issued a warning to all UK investors:

“Due to the potential for losses, the FCA considers this investment to be high risk.”

Key Risks You Should Be Aware Of

1. You Could Lose All the Money You Invest
   • Cryptoassets are known for their high volatility. Their value can plummet as quickly as it can rise, meaning you could lose all the money you invest. Due to the largely unregulated nature of the cryptoasset market, there is also a risk of losing your cryptoassets due to cyber-attacks, financial crime, or the failure of a firm you invest in.
2. No Protection if Something Goes Wrong
   • The Financial Services Compensation Scheme (FSCS) does not protect cryptoasset investments because they are not considered “specified investments” under UK law. If you invest in cryptoassets, you will not be protected by the FSCS in case of failure.
   • Additionally, the Financial Ombudsman Service (FOS) cannot help with poor investment performance. They can only consider complaints against FCA-regulated firms.
3. You May Not Be Able to Sell Your Investment
   • There is no guarantee that you can easily sell your cryptoassets at any time. Factors such as market supply and demand play a major role in determining the ability to sell. Operational issues, such as technology failures, cyber-attacks, or fund mishandling, may cause delays, making it difficult to liquidate your investment when you need to.
4. Cryptoasset Investments Can Be Complex
   • Cryptoasset investments can be difficult to understand, especially for first-time investors. Before making any investments, you should conduct thorough research and only invest in products you fully understand. If something seems too good to be true, it likely is.
5. Don’t Put All Your Eggs in One Basket
   • Putting all your money into one type of investment is risky. Diversifying your investments across different assets can help mitigate risks and reduce your dependency on a single investment. A prudent rule is not to invest more than 10% of your total wealth in high-risk assets like crypto.

How to Protect Yourself

If you are keen to learn more about protecting yourself while investing in cryptoassets, the FCA’s website is a great place to start. The website offers valuable resources to help you understand the risks and make informed decisions.

For further information about cryptoassets, the FCA provides detailed information about asset risks, including various categories of cryptoassets. Make sure you read and understand these risk summaries before proceeding with any investment.

Remember: Not All Cryptoassets Are Alike

Before making any investment, ensure you understand the specific risks involved with the asset you’re considering. Different types of cryptoassets have different levels of risk, so it’s crucial to research and be aware of the potential downsides before you invest.

阅读更多中文内容： 英国新法规：加密资产投资的风险与保护措施