The cryptocurrency segment is frequently troubled and lately due to misleading advertisements. However, such misleading campaigns will have no place henceforth as the Financial Conduct Authority (FCA) reveals to be cracking down. It has been warning the dangers of such misleading advertisements for months and may lead to more risks for investors.
The number of consumers holding crypto coins in the UK was 2.3 million in 2021 and the figure outpaced the understanding about how such assets may work. Advertisements of the segment will be treated the same way as the advertisements of other financial products.
The watchdog's announcement will bring to an end all the contradictions related to differences in the regulation of promotional materials compared to other financial products. The FCA simultaneously revealed the warning statements on such products would be replaced to make them more effective.
What is FCA
The Financial Conduct Authority is an independent regulatory body in the United Kingdom and operates in the financial industry to keep the funds of customers protected. It was formed in April 2013 as a company limited by guarantee. It succeeded the Financial Services Authority (FSA) and works alongside the Financial Policy Committee and the Prudential Regulation Authority.
What is Cryptocurrency
Cryptocurrency is a digital currency and a medium of exchange with the help of a computer network. It is decentralized and not under the control of any government, bank or authority. It is based on a digital public ledger technology called blockchain that is equipped with strong cryptography to secure transaction records. It is different from traditional currencies and not available in physical form.
Bitcoin is the first cryptocurrency and was launched in 2009. Today, the market is equipped with thousands of cryptocurrencies and some of the major ones are Ethereum, Litecoin, Dogecoin, Bitcoin Cash and Polkadot.
What is Bitcoin
Bitcoin is the first cryptocurrency and was released in 2009. It uses a peer-to-peer network and no intermediaries are required in transactions from one end to another. The transactions are recorded in a public distributed ledger and verified by network nodes through cryptography.
The coins are created through a process called mining and these can be exchanged for products and services as well as other currencies. Some of the top-performing crypto mobile apps in the UK are Coinmama, Binance, eToro, Webull and Gemini.
Trading cryptocurrencies is risky. The market is highly volatile and price movement is almost unpredictable. Amid the COVID-19 pandemic, the demand for major crypto coins increased several folds as investors shifted their investments from the financial products to it. The prices of Bitcoin, Dogecoin and a couple of more coins jumped to their all-time high during the period.