No Compensation to Investors for Crypto Losses, Says FCA’s CEO
No Compensation to Investors
Nikhil Rathi - the chief executive officer of the FCA, addressed his proposal to the Treasury Committee. He shared his opinion and stated that the UK cryptocurrency industry must draw pretty clear lines. He believes that altcoins and bitcoin have been a "vector for serious organized crime' and money laundering. According to him, before investing, investors must investigate related risks associated with the crypto market.
He strongly backed the Financial Services Compensation Scheme (FSCS) should no longer reimburse those who have lost sums when dealing with the asset class:
"I would suggest we simply say that anything crypto-related should not be entitled to compensation, that consumers are clear about that when they are investing."
British Statutory Deposit Insurance and Investors Compensation Scheme
There is a compensation scheme for customers of authorized financial services firms. As per scheme norms, locals are eligible to receive some reimbursements, unfortunately, if they become victims of any fraudulent activities in the cryptocurrency markets.
Rathi has pushed for a more active approach to safeguarding customers from cryptocurrency-related scams. FCA has observed a surge in applications from digital asset exchanges seeking regulatory permission.
The FCA urged local investors at the start of the year to be wary of the risks of investing in certain digital asset ventures, particularly those that are unregulated and promise huge profits.
Not the First to Criticize Cryptocurrency
David Lingberg, NatWest's Chief Executive Officer of Retail Banking, is a haven for cryptocurrency scammers. He, like Rathi, recommended people to avoid the bitcoin business because it is full of scammers who set up false exchanges.
Lindberg went on to say that he has "never seen a market worse" for frauds than the United Kingdom. The situation can only be remedied if the British government, police, banks, and social media companies work together to battle bad actors.
However, the United Kingdom is one of the countries with the strictest cryptocurrency legislation, and it is impossible to imagine it as a haven for bitcoin scammers.