The UK Financial Conduct Authority (FCA) has released datashowing a 222% increase in cryptocurrency-related fraud investigations between April 2020 and March 2021 .
The British regulator says it received a total of 176 investigations into possible cryptocurrency fraud in April 2020, rising to 566by March 2021. The FCA suggests that part of this increase may be due to changing characteristics of investors and investment decisions.
“Young people are twice as likely as adults in general to invest in high-risk investments. For example, 44% of cryptocurrencies and 31% of crowdfunding investments are held by people under the age of 34.”
Looking at this new data released by the FCA, it is normal for the regulator to take a critical stance against the cryptocurrency industry.
As is known, the FCA has taken a consumer protection-oriented approach to cryptocurrencies over the past year. In January of this year, the FCA even issued a warningto consumers about the risks involved in cryptocurrency investments .
“Investing in cryptocurrency assets, related investments and loans often involves taking very high risks with investors’ money. If consumers invest in such products, they should be prepared to lose all their money.”
Investors Should Be Ready for Risks
Explaining the five risks it identifies in cryptocurrency assets, the FCA lists them as follows; lack of consumer protection and price volatility, product complexity, fees and misleading marketing materials that can put consumers at”high riskof loss” listed them as risks specific to cryptocurrency assets.