The FCA UK does not include crypto in the high-risk investments updates. On 1 August, the UK’s Financial Conduct Authority (FCA) posted updates on Twitter about high-risk investments.
FCA New Post About High-Risk Investments
We’re strengthening our rules for firms communicating and approving financial promotions for high risk investments https://t.co/rGwpTSysKK
— Financial Conduct Authority (@TheFCA) August 1, 2022
On 1 August, FCA took to Twitter to post updates on high-risk investments. One of the reasons for the updates is that some people who invest in high-risk investments do not fully understand that they can lose money from the activities. These new rules by the FCA will help tackle poor financial promotions and minimize unexpected consumer losses.
Under these rules, firms marketing some high-risk investments need a better monitoring system to ensure consumers and their investments are compatible. Also, firms “need to use clearer and more prominent risk warnings and certain incentives to invest.”
However, these new rules do not apply to crypto assets. The FCA added, “Once the Government and Parliament confirm in legislation how crypto marketing will be brought into the FCA’s remit, the FCA will publish final rules on the promotion of qualifying crypto assets.” But the rules are likely similar to the ones they have posted for high-risk investments. Crypto is a high-risk investment, and people need to know they can lose money in the activity.
Sarah Pritchard, Executive Director, Markets, added that they want people to enter the activity of high-risk investments with confidence, understand the situation, and get suitable investments.
How Will It Affect People in The Community?
The FCA’s concern about high-risk investments will make people in the community more aware of what high risks they are taking. The UK government also has been setting its eyes on misleading crypto ads that said high benefits without educating the risks. Especially since the community keeps growing, people may not know the details of the investments and do it because of others.