Risk Summary

Estimated reading time: 2 minutes

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

What are the key risks?

1. You could lose all the money you invest

The performance of most cryptoassets can be highly volatile, and their value can drop sharply and quickly. You should be prepared to lose all the money you put into cryptoassets. The cryptoasset market is largely unregulated, and there is a risk of losing money or cryptoassets through risks such as cyber-attacks, financial crime and firm failure.

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 is not a "specified investment" under UK regulation. You can learn more by using the FSCS investment protection checker on the FSCS website. The Financial Ombudsman Service (FOS) is unlikely to be able to consider complaints about this type of investment.

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 depends on buyers and sellers in the market, which can change significantly and quickly. Some platforms may also experience outages or restrict withdrawals.

4. Cryptoasset investments can be complex

Investments in cryptoassets can be complex, making it difficult to understand the risks associated with them. Do your own research before investing. If something sounds too good to be true, it probably is.

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

If you're interested in learning more about how to protect yourself, visit the FCA's website.