Recently the UK Financial Ombudsman Service (FOS) has expressed its opinion on cryptocurrency, among the other topics raised by UK investors, in its Annual Review 2017/18.
In the above-mentioned Review, the Ombudsman classify cryptocurrency as other risky investments category and noted the excessive volatility of cryptocurrency. Many activities relating to cryptocurrencies are not regulated. Investors in “Initial coin offerings” run the risk of losing all their financial assets without any recourse to the Financial Services Compensation Scheme (FSCS), warned Financial Conduct Authority (FCA) in September 2017.
The report also refers to the reasons for an active involvement of individuals in crypto investing. Among many appeal aspects, were pointed out - a possibility of being a part of something new and the availability of a great number of different digital currencies.
It important to note, that the sphere of crypto investment does not directly relate to Ombudsman. However, cryptocurrencies may be involved in other types of financial activities and the Ombudsman may consider such complaints. For example, this year the Ombudsman considered situations when people lost money from contracts for difference on cryptocurrency.
The UK government takes a cautious approach especially when it comes to cryptocurrency. The government had no plans to recognize digital currencies as legal tender or to propose designating them as financial instruments, said John Glen, Economic Secretary to the Treasury and City Minister.
But the main point of the report is that cryptocurrency investors are still left unprotected, mainly when the losses are related to price volatility. Stay tuned for great number of actual news related to this topic.
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