British FCA Has 3 Ways To Keep Cryptocurrency Investors Safe

The British FCA has 3 ways to keep crypto investors safe as it laid out the risks of investing in crypto as well so let’s read more in our latest cryptocurrency news today.

The Chair of the Financial Conduct Authority Charles Randell along with the Prudential Regulation Authority delivered an address during the Cambridge International Symposium on Economic Crime where he said there were serious challenges and risks involved in regulating crypto:

“These tokens have only been around for a few years, so we haven’t seen what will happen over a full financial cycle. We simply don’t know when or how this story will end, but—as with any new speculation—it may not end well.”

He reiterated that speculative cryptos are not regulated by  the FCA and consumers are not covered or protected by the Financial Services Compensation Scheme which is a scheme that compensates consumers in an event of failing businesses:

“It’s difficult for regulators around the world to stand by and watch people, sometimes very vulnerable people, putting their financial futures in jeopardy, based on disinformation and fear of missing out.”

The solution for regulators is to focus on three major issues. First, make it harder for crypto to be used for financial crimes. Second, regulators have to consider how to support useful innovation, and also they will have to take a view as to how free consumers should be to buy unregulated cryptocurrencies before the regulators actually step in:

“The tide of regulation is turning all over the world, and online platforms should expect a future where regulation addresses the significant risks they pose in the same way as other businesses. Same risk, same regulation.”

This is not the first time that the British FCA spoke out against risks in the crypto industry. It even published a consumer warning against the investments advertising high returns based on crypto:

“Investing in crypto assets, or investments and lending linked to them, generally involves taking very high risks with investors’ money. If consumers invest in these types of products, they should be prepared to lose all their money.”

The FCA even took time to outline five major risks behind the industry. The risks consist of price volatility, consumer protection, product complexity, charges, and fees:

“Consumers should be aware of the risks and fully consider whether investing in high-return investments based on crypto assets is appropriate for them. They should check and carefully consider the crypto asset business involved.”

Source: https://www.dcforecasts.com/regulation/british-fca-has-3-ways-to-keep-cryptocurrency-investors-safe/