Cryptocurrency regulations are stated by the UK financial regulator. The Financial Conduct Authority (FCA) has issued a warning against investing in cryptocurrencies. This when the major BTC collapse happened. On January 11, the FCA said that investing in cryptocurrencies and lending was associated with a high-risk level. They also say that investors should prepare themselves to lose all their money when investing in cryptocurrencies. But if you follow the latest cryptocurrency news, it is not a major risk. But the importance of knowledge is important. You just need to know what to do with cryptocurrencies.
Why we need cryptocurrency regulations according to the FCA?
Firstly, the FCA stated that investors take responsibility for crypt risks. This referring to several risks, including price volatility, product complexity, and fees:
“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.”
If something goes wrong, the regulator 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. 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 in the United Kingdom must register 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. This 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.
