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Due to the potential for losses, the Financial Conduct Authority (FCA) considers this investment to be high risk.

Before considering any investment in crypto assets, you should be aware of the following risks:

What are the key risks?

1. You could lose all the money you invest

• The performance of most cryptoassets can be highly volatile, with their value dropping as quickly as it can rise.
You should be prepared to lose all the money you invest in cryptoassets.

• The cryptoasset market is largely unregulated. There is a risk of losing money or any cryptoassets you
purchase due to risks such as cyber-attacks, financial crime and firm failure.

2. You should not expect to be protected if something goes wrong

• The Financial Services Compensation Scheme (FSCS) doesn’t protect this type of investment because it’s not a
‘specified investment’ under the UK regulatory regime – in other words, this type of investment isn’t recognised
 as the sort of investment that the FSCS can protect. Learn more by using the FSCS investment protection
checker here.

• The Financial Ombudsman Service (FOS) will not be able to consider complaints related to this firm.

3. You may not be able to sell your investment when you want to

• There is no guarantee that investments in cryptoassets can be easily sold at any given time. The ability to sell
a cryptoasset depends on various factors, including the supply and demand in the market at that time.

• Operational failings such as technology outages, cyber-attacks and commingling of funds could cause unwanted
delay and you may be unable to sell your cryptoassets at the time you want.

4. Cryptoasset investments can be complex

• Investments in cryptoassets can be complex, making it difficult to understand the risks associated with the
investment.

• You should do your own research before investing. If something sounds too good to be true, it probably is.

5. Don’t put all your eggs in one basket

• Putting all your money into a single type of investment is risky. Spreading your money across different
investments makes you less dependent on any one to do well.

• A good rule of thumb is not to invest more than 10% of your money in high-risk investments.

If you are interested in learning more about how to protect yourself, visit the FCA’s website here.

For further information about cryptoassets, visit the FCA’s website here.

Why you’re seeing this

Zumo writes for institutions. Our content covers the economics of digital assets, the regulatory picture, and what the next phase of the market means for banks, funds and platforms. It is written for people assessing crypto as part of their work.

Anyone can read it. If you have arrived here from something we published and you are now thinking about buying cryptoassets yourself, the risks set out above apply to you, and they are the ones to understand first.

Zumo is a UK-based digital assets infrastructure provider. We do not provide investment services, and it is not possible to buy cryptoassets through Zumo. Nothing we publish is financial, investment, tax or legal advice, and nothing on this page is a recommendation to buy, sell or hold any cryptoasset.