FX.co ★ FCA: investors risk losing all their money

An unprecedented rise in the first cryptocurrency has caused a lot of concerns amid both market participants and state regulatory authorities.

The Financial Conduct Authority (FCA) was the first to express alarm. The fact is that the popularity of cryptocurrencies led to a large number of allegedly lucrative offers. Thus, market participants received a chance to make loans in cryptocurrencies and invest in crypto assets. British investment companies became the pioneers in this sphere. These firms began offering crypto asset-linked investments that promised high returns compared to classic assets.

The FCA made an announcement just before the bitcoin’s slump. Notably, the announcement was not the reason for such a sharp movement in the price. The crypto market is still attracting large management companies as well as ordinary investors. A significant drop that took place on January 11 was not the beginning of a collapse. That day, the capitalization of all cryptocurrencies traded in the world fell by $170 billion. However, the market recouped almost all losses two days later. The FCA also warned that the state regulators did not control investment companies. That is why such companies might benefit from the situation and resort to fraudulent schemes.