According to one blockchain analytics firm*, a torrent of negative reports about the cryptocurrency industry has spooked investors, with as much as $3 billion withdrawn from Binance on Tuesday this week. The world’s largest bitcoin and altcoin crypto exchange by volume, Binance has suffered a period of huge withdrawals with low levels of investments made of late, although the company states that it has seen worse days and is already “seeing the money flowing back”. According to a spokesperson for Binance the fund withdrawals signify “very normal market behavior.”
But, with investors rattled following the collapse of FTX in November, and criminal charges filed against FTX crypto boss Sam Bankman-Fried, there are significant concerns about the health of the cryptocurrency sector. In response, the Hong Kong markets watchdog has warned of cryptocurrency platform threats, stating that “Investors are urged to be wary of the potential high risks”
According to a statement by the Securities and Futures Commission (SFC): “Whilst some VA [virtual asset] Arrangements are commonly labelled or marketed as ‘deposits’ or ‘savings’ products, they are not regulated and are not the same as bank deposits. Investors are not afforded with any form of protection.” The SFC added that if investors “cannot fully understand them and bear the potential significant or total losses, they should not make an investment.”
This replicates advice from the FCA, which states that “Crypto assets are considered very high risk, speculative purchases. If you buy crypto assets, you should be prepared to lose all your money.”
Cryptocurrency Fraud & Mis-selling Compensation
At KP Law, as lawyers, we are not able to advise clients on any type of financial investment, including cryptocurrency. But we would advise people to be wary.
In addition to the volatility in the market, fake cryptocurrency investments are also a growing concern. In 2021, according to Action Fraud, Britons lost more than £150 million to cryptocurrency fraudsters, with 18-25-year-olds the hardest hit. Like traditional money, cryptocurrencies can be used to buy goods and services, and they can be traded for profit. So, it is no surprise that the cryptocurrency is being targeted by criminals. With the equivalent of millions of pounds being stolen from cryptocurrency holdings each year, this is a very lucrative market.
Unfortunately, many people who invested in crypto assets, often on the recommendation of trusted financial advisors, have now suffered substantial losses. But if you have you lost money due to a crypto scam or bad financial advice, we may be able to help you get your money back. If any of the following applies to you, contact KP Law to discuss a potential claim.
- A financial advisor convinced you to invest in a cryptocurrency product that was unsuitable for you needs.
- A financial advisor did not give you enough information about the recommended investment, or if they misled you in any way.
- You invested in a cryptocurrency scheme which turned out to be a scam.
Contact our expert Investment Fraud & Mis-selling team today
Have you been persuaded to invest in risky, unregulated, and unsuitable schemes involving NFTs or other forms of crypto, and promises of significant returns did not materialise? Or did you invest in a crypto scheme that turned out to be a scam? If so, we can help.
Representing individuals who have fallen victim to financial scams and mis-selling, we have managed to reclaim hundreds of thousands of pounds for our clients.
Contact us today for a free, no-obligation assessment of your case.
