UK’s Financial Conduct Authority (FCA) found that while people are increasingly investing in cryptoassets and no longer think of it as a gamble, they should be “prepared to lose all their money.”
Overall, public awareness and the FCA’s estimate for ownership is up to around 2.3 million, up from around 1.9 million in 2020 – and 78% of adults have now heard of cryptocurrencies.
Enthusiasm for cryptoassets is growing with over half of crypto users saying they have had a positive experience so far and are likely to buy more as the figure rose from 41% to 53%. Fewer people also regret having bought cryptocurrencies, down from 15% to 11%.
The regulator also noted that whereas nearly half of investors (47%) last year considered their stake in cryptoassets as a gamble, that proportion had now dropped to 38%.
The research has prompted a fresh warning from the FCA that crypto investors risk losing the lot. The FCA warned that any problems with these investments were not covered by the usual safety nets as they were unregulated assets.
This means that unlike with regulated investments, buyers would not get support from the Financial Ombudsman Service or the Financial Services Compensation Scheme if they were mis-sold crypto or the provider went bust.
Commenting on the new findings, FCA’s executive director, consumers and competition Sheldon Mills said, “The market has continued to grow, and some investors have benefitted as prices have risen. However, it is important for customers to understand that because these products are largely unregulated that if something goes wrong they are unlikely to have access to the FSCS or the Financial Ombudsman Service. If consumers invest in these types of products, they should be prepared to lose all their money.”
This is the FCA’s fourth consumer research publication on cryptoasset ownership, part of a strategy to develop its thinking on the potential harms and benefits to consumers from cryptoassets and help better understand consumers’ attitudes and patterns of use.
Since beginning this strategy, the regulator has issued further consumer warnings, stating that investing in cryptoassets is high risk.
It pledged to continue working with the Treasury and other regulators, including through the UK Cryptoasset Taskforce.
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