The U.K.’s Financial Conduct Authority has reminded consumers that cryptocurrency investments are very risky… just before markets crashed
The Financial Conduct Authority, the U.K.’s regulatory body, issued a warning about cryptocurrency investments shortly before the markets collapsed.
In a January 11 statement, the FCA explained that crypto investments and loans present a high level of risk, stressing that investors should be prepared to lose large amounts of money.
This warning about the risks of cryptocurrencies was issued on Jan. 8, when Bitcoin Sunrise had reached a new all-time high at around $42,000. Today, just three days later, the market witnessed a huge sell-off: the price of BTC temporarily hit a low of $33,000. At the time of writing this article, Bitcoin is trading for around $35,000, down 14% from yesterday.
The FCA said that there should be greater awareness about the risks associated with cryptocurrencies, as it is a very volatile and complex product:
„Consumers should be aware of the risks and carefully consider whether investing in high-yield cryptocurrency-based products is appropriate for them.“
The regulator also pointed out that most crypto investors do not have access to consumer protection services, such as the Financial Ombudsman Service or the Financial Services Compensation Scheme, in case something goes wrong.
The institution went on to remind that companies offering cryptocurrency-related services should make sure that they comply with all regulatory requirements and have obtained an authorization from the FCA. As of January 10, 2021, in fact, all crypto companies operating in the UK must be registered with the FCA in order to combat money laundering. „Operating without registration is a crime,“ the agency wrote.
The contraction also affected the rest of the market: in just one day, the price of Ether (ETH) fell by almost 19%.
Student rediscovers long-lost Bitcoin private keys: earns $4 million
A Reddit user tells of finding an old wallet containing 127 BTC, which he sold for $4.24 million
A student tells of finding the private keys to a wallet accidentally created in 2011, containing over $4 million in Bitcoin.
On Reddit, user BitcoinHolderThankU says he was able to get his hands on $4.2 million through the sale of 127 Bitcoins (BTC):
„I spent the next week trying to figure out how to safely liquidate such a large sum of Bitcoin at the lowest possible price. I tried various over-the-counter desks, and eventually managed to sell all 127 BTC at a price of $33,439.02 per coin, with a 0.15% commission. The net gain was 4.24 million.“
The user recounts that he earned such Bitcoins between 2011 and 2012 by „completing surveys, watching videos, and completing various activities,“ so that he could purchase the virtual currency for the online game DarkOrbit. However, this transaction never happened, and the 127 BTC remained inside an old Dell computer until today.
The user could have earned another million dollars if only he had waited a few more weeks: the price of Bitcoin recently touched $42,000. BitcoinHolderThankU admits that, in hindsight, he shouldn’t have sold all of his BTC:
„In my defense, I’ve been HODLing for 8-9 years – that’s a lot more than the vast majority of crypto users. I definitely would have done things a lot differently, looking back.“