Crypto investors may be excluded from the Financial Services Compensation Scheme (FSCS) in the United Kingdom. The corresponding proposal is contained in a document FCA, published for public consultation.
“The FSCS could be focused on core products that are more likely to meet the needs of ordinary investors. … Non-core instruments such as crypto assets, securities that have not been listed, or unregulated schemes of collective investment, in certain circumstances may be excluded from FSCS protection,” the document says.
In the event of insolvency of a financial institution licensed in the United Kingdom, the FSCS provides payouts of up to $112,700 per affected customer.
The scheme is funded by participating firms, so the FCA aims to reduce costs. The document notes that over the past decade total fees have tripled—from around $312 million to around $951 million per year.
The regulator also questions whether wealthy or sophisticated investors should be entitled to claim compensation.
The FCA intends to gather public input by 4 March 2022. The regulator stressed that after the consultation many proposals may be dropped.
The watchdog has repeatedly warned about the risks of investing in cryptocurrencies. In September, Chief Executive Nikhil Rathi said that investors in such products «should be prepared to lose all their money».
Earlier, the regulator counted 2.3 million crypto investors in the country.
In September, the FCA warned of a tightening of crypto-industry regulation.
The Bank of England described the Bitcoin collapse «a plausible scenario».
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