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“Investors Should Not Receive Compensation for Crypto Losses”

Nikhil Rathi, CEO of the UK’s top financial regulator FCA, suggested that compensations should not be paid to investors in cryptocurrency by the British government in case of loss.

The top executive stated that digital assets were used in criminal activity and that investors who deal with them “must not be prepared to lose all their money.”

The UK needs to draw some pretty clear lines

Nikhil Rathi, Chief Executive Officer of FCA, addressed the Treasury Committee about his views on the UK cryptocurrency industry. He stated that bitcoin and altcoins have been “vectors for serious organized crime and money laundering”, and investors should be aware of these risks before investing in the market.

The Financial Services Compensation Scheme, (FSCS), should not reimburse anyone who has lost money when they dealt with an asset class.

“I think we should simply state that crypto-related items should not be eligible for compensation and that investors are aware of that fact when they invest.”

The FSCS is the British statutory investment insurance and investors compensation scheme. It is available to customers of licensed financial service firms. If they are victims of fraudulent activity in cryptocurrency markets, locals may be eligible for reimbursements.

Rathi said that there had been a spike in applications from digital assets exchanges looking to obtain regulatory approvals. Many were “below par” and the watchdog had not yet given their approval.

Rathi, 42 years old, was named as the successor to Andrew Bailey. Rathi, as his leader, has advocated for a more aggressive approach in protecting customers from scams related to crypto-related.

The FCA warned investors in the local area about the risks of investing in digital assets. This was especially true for firms that are not regulated and promise high returns. The regulator stated that anyone dealing with bitcoin or alternative coins should be prepared to lose all their funds.

Not the first to bash crypto

David Lingberg, Chief Executive Officer for retail banking at NatWest, says that the UK is a haven for crypto-scammers. Rathi also advised people to avoid the cryptocurrency industry as fraudsters create fake exchanges.

Lindberg stated that he had never seen a better market for scams than the UK. According to Lindberg, the solution lies in a partnership between the British government and the police, banks and social media operators who work together to combat the scammers.

It is true, however, that the UK has some of the most stringent regulations regarding cryptocurrency. This makes it difficult to see the UK as a haven for crypto-scammers.