What Risks and Regulations Should I Be Aware Of?
| Don't invest unless you're prepared to lose all the money you invest. This is a high-risk investment, and you should not expect to be protected if something goes wrong. Take 2 minutes to learn more about the risk involved. [Approved by Archax 16/05/2025] |
Important: We are aware of an issue where iOS users may be unable to view the individual crypto assets in their portfolio. This is a known display issue only — client assets remain secure and unaffected. A resolution has been submitted to the App Store and will be deployed once approved. Please check for updates and install the latest version of the app to resolve the issue once available. |
What are the Common Risks Involved in Cryptocurrency?
Market Risks:
- Volatility: The performance of most crypto assets can be highly volatile, with their value dropping as quickly as it can rise.
- Liquidity Risk: There is no guarantee that investments in crypto assets can be easily sold at any given time.
Operational Risks:
- Security Risk: Vulnerability to cyber-attacks, financial crime and firm failure.
- Regulatory Risk: Evolving regulations may impact asset legality or availability.
- No Regulatory Protection: The Financial Services Compensation Scheme (FSCS) doesn't protect this type of investment.
What Do I Need to Know About Cryptocurrency Regulations?
What Role Does the FCA Play?The Financial Conduct Authority (FCA) oversees cryptocurrency compliance, client protection, and transparency in the UK. It's important to understand that the Financial Services Compensation Scheme (FSCS) doesn't protect cryptocurrency investments because they aren't considered "specified investments" under UK regulations. While you can complain to the Financial Ombudsman Service (FOS) about FCA-regulated firms, they won't be able to consider poor investment performance. |
What Is the Travel Rule and How Will It Affect Me?The Travel Rule is part of global Anti-Money Laundering efforts. It requires cryptocurrency service providers to share information about senders and recipients for transactions above certain amounts. While not fully enforced in the UK yet, the FCA is preparing to align with Financial Action Task Force standards. This means:
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If you are interested in learning more about how to protect yourself, visit the FCA's website. Understanding the regulatory framework, recognizing specific risks, and implementing responsible trading practices are essential for navigating this complex market. As with all high-risk investments, careful consideration of your financial circumstances and investment objectives should precede any cryptocurrency trading activities. |
