British Regulator: Bitcoin Buyers Should be Ready to Lose All Their Money

December 15, 2017

British Regulator: Bitcoin Buyers Should be Ready to Lose All Their Money

The head of Financial Conduct Authority issued a "serious warning" for Bitcoin buyers. It says that they can lose all their money if they invest in cryptocurrency.

"If you want to invest in Bitcoin, then get ready for that you can lose all your money," general director of the department Andrew Bailey said on the BBC.

To Bailey’s mind, the lack of regulation of the most popular cryptocurrency by governments and central banks proves that it is not a safe investment. He also noted that investments in cryptocurrencies are similar to gambling in many aspects, as the level of the risk is the same.

"This is not a currency, but an extremely unstable product. Look at everything that has happened to Bitcoin this year. I want to warn people. We know little about Bitcoin's pricing," Bailey said.

Besides, he underlined that, in his opinion, the name of "cryptocurrency" could be misleading.

"This name implies risks. Some people might think that it is the same thing as the economic term "fiat money". However, fiat money is provided by governments, and its price is maintained by central banks. Bitcoin does not have that, it is not a currency."

It is noteworthy that not for the first time the agency warns the population of the danger of cryptocurrencies and their related products. Earlier, the department issued an official warning, in which it stated that the trade in cryptocurrency contracts for difference was a dangerous and speculative form of investment.

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