UK Regulator warns Cryptocurrency Investors could ‘lose all their money’, as BTC price drops

Bitcoin price dropped from its all-time high of $42,000 on Monday. Analyzing this scenario, the UK’s financial regulator said that people who invest in cryptocurrencies may lose all their money.

Bitcoin price raised more than 300% in the previous year. This tremendous increase in price has attracted the attention of the public and institutional investors as well. 

While the price raised instantly, it also dropped within no time as the currency is more volatile. Between Friday and Monday, the currency dropped by 15% i.e the price dropped from $41,800 to $34,645.

The financial regulators across the world are also attracted by the sudden rise in the Bitcoin price. But, they are worried about the amateur investors who could be sucked in for Bitcoin to drop in value as it did in 2018. 

Britain’s Financial Conduct Authority stated that:

“If consumers invest in these types of product, they should be prepared to lose all their money.”

The watchdog exclaimed that it was worried because of a few firms offering investment in crypto related products as they seek to capitalize on the rally. They stated:

“Significant price volatility in crypto assets, combined with the inherent difficulties of valuing crypto assets reliably, places consumers at a high risk of losses”.

Adding to it they said, 

“The complexity of some products and services relating to cryptoassets can make it hard for consumers to understand the risks. There is no guarantee that cryptoassets can be converted back into cash. Converting a cryptoasset back to cash depends on demand and supply existing in the market.”

The regulators are more worried about the collapse in Bitcoin’s price between late 2017 and early 2019 as it dropped from $20,000 to below $4,000.

The FCA stated that cryptocurrencies like Bitcoin are highly unregulated. It said investors may be unlikely to have recourse as compensation or complaints “if something goes wrong”.

Regulators are attempting to restrict the cryptocurrency rules. Since Sunday, the FCA requires all UK cryptocurrency firms to register with them as a part of regulations to tackle money laundering. 

IN the US Financial Crimes Enforcement Network in December released the idea the companies will have to collect information on the cryptocurrency wallet holders. Jack Dorsey, who runs the payments company SQUARE is also one of the critics of the idea. 

Also Read: Another NASDAQ Traded Company To Invest $100M In Bitcoin