Crypto Risk Summary

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

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) as 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 and protection from the Financial Ombudsman Service (FOS) does not cover poor investment performance. Learn more about FOS protection here.

3. Purchasing Cryptoassets Through Transak

• You can only purchase cryptoassets through Transak through your online devices, Transak does not take telephone orders. Once a transaction is complete, it cannot be reversed.
• Once you have successfully purchased your cryptoassets through Transak, it is your responsibility to keep them secure in your custody. You own the assets and bear any investment risks after purchasing.

4. 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.

5. 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.

6. Not all cryptoassets are the same

• All cryptoassets are risky; some may have additional risks specific to their nature.
• Stablecoins carry vulnerabilities. Algorithmic stablecoins aren’t backed by a currency and can experience significant volatility. Please read more here.

7. 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. Learn more here.

For further information about how to protect yourself, visit the FCA’s website here. For further information about cryptoassets, visit the FCA’s website here.

The risks of different cryptoasset products

Not all cryptoassets are alike. Before investing, you should ensure you understand the specific risks involved. To learn about the risks of certain cryptoassets, please click here.