Cryptocurrency regulations are stated by the UK financial regulator, the Financial Conduct Authority (FCA), has issued a warning against investing in cryptocurrencies when the major BTC collapse happened.
In a statement on January 11, the FCA said investing in cryptocurrencies and lending was associated with a high-risk level. He stresses that investors should be prepared to lose all their money when investing in cryptocurrencies. But if you follow latest cryptocurrency news, or just know what to do with cryptocurrencies it is not a major risk. But the importance of knowledge is important.
Why we need cryptocurrency regulations according to the FCA?
Referring to several risks, including price volatility, product complexity, and fees, the FCA stated that investors take responsibility for crypt risks:
“Consumers should be aware of the risks and thoroughly consider whether high-return investments based on crypto-sets are appropriate for them. They should review and carefully consider the crypto-set trade. “
The regulator also stated that crypto-investors are unlikely to access significant consumer protection institutions, such as the Financial Ombudsman’s Service or the Financial Services Compensation Scheme if something goes wrong. But is this enough as a justification for cryptocurrency regulations in UK?
The FCA noted that companies offering crypto-related services should ensure that they comply with all applicable regulatory requirements. And most importantly, they must have permission from the FCA. The agency wrote that from January 10, 2021, all crypto-exchange companies based in the United Kingdom must be registered with the FCA under anti-money laundering regulations. “Operating without registration is a crime,” the FCA added.
Britain’s warning comes amid a significant drop in cryptocurrency markets after Bitcoin recorded its new all-time high of $ 42,000 on January 8. On January 11, BTC recorded a massive sell-off, representing a movement of 23%.
Besides, BTC has brought other cryptocurrencies, which are even declining even more than the leading cryptocurrency.