Cryptocurrencies are “small, complex and evolving market covering a broad range of activities,” Christopher Woolard, executive director of Strategy and Competition at the British financial regulator FCA said presenting the Final Guidance.
The document, which sets out the cryptoasset activities it regulates, allows firms to have a better understanding of whether they need to be authorised and what they need to do to ensure they are compliant.
Indeed, it “will help clarify which cryptoassets fall inside our regulatory perimeter,” Woolard added. This is the case, for example, of security tokens and utility tokens as they act like shares or debt instruments and have ownership rights.
Conversely, cryptoassets like Bitcoin and Ether are not covered by the Financial Services Compensation Scheme and consumers do not have recourse to the Financial Ombudsman Service.
Consequently, consumers should be cautious when investing in those and should ensure they understand and can bear the risks involved with assets that have no intrinsic value, a press release reads.
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