Members of the British parliament pointed out to the chief executive of the United Kingdom’s Financial Conduct Authority FCA Nikhil Rathi that the purchase of Bitcoin and other cryptocurrencies is not an investment, The Times reports.
“The words ‘your investment’ endorse the idea that this is an investment on a par with a FTSE 100 company or a unit trust”. Said a member of the House of Commons, Harriett Baldwin, at a meeting of the profile committee.
She also noted that the list of unregistered cryptocurrency companies published by the regulator may contribute to money laundering attempts. “It should be useful, but the list can also be used by those who just want to launder money,” the MP and former JPMorgan employee added.
The Financial Services Compensation Scheme
Nikhil Rathi promised the deputies to think about what the wording should be.
“Personally, I suggest just saying that everything related to cryptocurrency should not be eligible for compensation; so that consumers know about it when they invest,” he added.
The possible exclusion of crypto investors from the “Financial Services Compensation Scheme” (FSCS) became known in early December. “FSCS can focus on core products that are more likely to meet the needs of ordinary investors. […] Non-core instruments like crypto assets, unlisted securities; or unregulated collective investment schemes may be excluded from FSCS protection under certain circumstances,” the document says.
Repeatedly warning consumers about risks of investing
Previously, the regulator has repeatedly warned consumers about the risks of investing in digital assets. In September, Rathi said that investors “must be ready to lose all their money.”
In addition, according to the survey of Redfield & Wilton Strategies, only 24% of Britons supported the introduction of the digital pound. Moreover, the greatest concern among citizens is the threat of hacker attacks and violation of privacy.
Other studies have shown that for 45% of young residents of the UK, cryptocurrencies became the first investment. But the main motive for investing was the hype around assets.