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The UK Financial Conduct Authority (FCA) plans a £11 million digital campaign to warn investors about the risks of investing in crypto-assets and other high-risk investments.
In a draft speech, the FCA’s CEO pointed to the risk of especially younger people investing in crypto-assets for fun:
‘We’ve seen an explosion among younger people speculating on cryptocurrencies or other high-risk investments. In the last year, we published research that found nearly 2.5 million people in the UK had bought cryptoassets. Analysis this year found those ‘having a go’ at this kind of investing were younger and, proportionally, more likely from an ethnic minority. There is evidence too that, as with the GameStop episode, more people see investment as entertainment – behaving less rationally and more emotionally, egged on by anonymous and unaccountable social media influencers. This is a category of consumer that we are not used to engaging with – 18 to 30-year-olds more likely to be drawn in by social media.’
The FCA has previously warned investors that they risk losing all their money if they decide to buy crypto-assets.The speech by the FCA’s CEO laid out plans to create an £11m digital marketing campaign to warn investors, once again, of the risks they face.
A working paper by the Bank for International Settlements did similar research to find out the average investor profile of those buying crypto-assets. The researchers in that paper focused on the US, and found some evidence that crypto-investors there were relatively well aware of the risks they were taking.