Tuesday, November 28, 2023

The UK’s Financial Conduct Authority CEO believes that the government should not reimburse investors for cryptocurrency losses

UK’s apex financial regulatory body FCA has declared that crypto investors will not fall under compensation schemes if they lose invested amounts due to frauds or scams. CEO of FCA Nikhil Rathi issued a statement about the same where he said that cryptocurrency investors need to account for the risk before investing. If something goes wrong, as had happened many times in the past, the government or FCA will be in no way liable for compensations.

Considering the unregulated nature of cryptocurrencies, it does not come as a surprise that the FCA is keeping itself out of compensatory claims. At the same time, the government of the UK has also instructed cryptocurrency exchanges not to market their products aggressively without any statutory warnings.

FCA has a Financial Services Compensation Scheme for those investors who fall for fraudulent schemes and lose money. The FSCS includes investment in stocks, bonds, securities, and other assets. There are many reasons behind the FCA excluding cryptocurrencies from the FSCS. The main reason is that cryptocurrency markets are widely unregulated, both inside and outside the United Kingdom. If investors start claiming recommendations, things will soon go out of hand for the FCA. To avoid confusion, the FCA issued a clear directive stating its inability to compensate crypto investors. Most countries in the world do not have any compensation scheme for crypto investors, and many have lost significant amounts of money to crypto-related financial crimes. However, the judiciary still has the power to order recovery and redistribution of money seized from criminals.

Cryptured Team
Cryptured Team
The writers team at Cryptured.com is composed of passionate and experienced journalists who cover the latest developments in the crypto and blockchain space. They aim to provide accurate, unbiased and easy-to-understand news and information for their readers, as well as insights and analysis from industry experts. The writers team is always on the lookout for new and exciting stories that can help the general public learn more about the potential and challenges of these technologies.

Most Popular