New UK Crypto Regulations

The UK financial regulator, the Financial Conduct Authority (‘FCA’), has expanded the scope of the financial promotions regime to enhance protections for UK users investing in cryptoassets. All cryptoasset firms - like Gemini - who market to UK consumers will have to comply with the new rules from 8 October 2023.

Notice to customers in the UK

Due to the potential for losses, the Financial Conduct Authority (FCA) considers this investment to be high risk.

What are the key risks?

  1. 1. You could lose all the money you invest

    • The performance of most cryptoassets can be highly volatile, with their value dropping as quickly as it can rise. You should be prepared to lose all the money you invest in cryptoassets.

    • The cryptoasset market is largely unregulated. There is a risk of losing money or any cryptoassets you purchase due to risks such as cyber-attacks, financial crime and firm failure.

  2. 2. You should not expect to be protected if something goes wrong

    • The Financial Services Compensation Scheme (FSCS) doesn’t protect this type of investment because it’s not a ‘specified investment’ under the UK regulatory regime – in other words, this type of investment isn’t recognised as the sort of investment that the FSCS can protect. Learn more by using the FSCS investment protection checker here.

    • Protection from the Financial Ombudsman Service (FOS) does not cover poor investment performance. If you have a complaint against an FCA regulated firm, FOS may be able to consider it. Learn more about FOS protection here.

  3. 3. You may not be able to sell your investment when you want to

    • There is no guarantee that investments in cryptoassets can be easily sold at any given time. The ability to sell a cryptoasset depends on various factors, including the supply and demand in the market at that time.

    • Operational failings such as technology outages, cyber-attacks and comingling of funds could cause unwanted delay and you may be unable to sell your cryptoassets at the time you want.

  4. 4. Cryptoasset investments can be complex

    • Investments in cryptoassets can be complex, making it difficult to understand the risks associated with the investment.

    • You should do your own research before investing. If something sounds too good to be true, it probably is.

  5. 5. Don’t put all your eggs in one basket

    • Putting all your money into a single type of investment is risky. Spreading your money across different investments makes you less dependent on any one to do well.

    • A good rule of thumb is not to invest more than 10% of your money in high-risk investments. Learn more here.

If you are interested in learning more about how to protect yourself, visit the FCA’s website here. For further information about cryptoassets, visit the FCA’s website here.

The risks of different cryptoasset products

Remember, not all cryptoassets are alike. Before investing, you should ensure you understand the specific risks involved. To learn more about the risks of specific crypto asset products please click the link here