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The Financial Conduct Authority (FCA), the UK’s financial regulator, has issued an urgent warning about Digital Assets Nest, a crypto investment firm.
The FCA warns that this firm is promoting financial services without proper authorization, posing significant risks to investors.
FCA Flags Digital Assets Nest as an Unauthorized Crypto Firm
In its warning about Digital Assets Nest, the FCA advises against dealing with this firm to avoid potential scams. The agency stated that engaging with such firms can result in significant financial losses.
According to the rule, in the UK, firms and individuals must be authorized by the FCA to offer or promote financial services. It encourages investors and traders to ensure they deal with authorized firms to safeguard their investments and have greater protection if issues arise.
Read more: The State of Crypto Regulation in the United Kingdom
“If you deal with this firm, you won’t have access to the Financial Ombudsman Service if you have a complaint. You also won’t be protected by the Financial Services Compensation Scheme (FSCS) if things go wrong. This means it’s unlikely you’d get your money back if the firm goes out of business,” the agency warned.
Based on the information on its website, Digital Assets Nest is a London-based crypto investment firm. It offers premium investment services to investors, both individuals and corporations.
BeInCrypto previously reported that FCA implemented a new rule in October 2023. The rule requires crypto firms to ensure their marketing is “clear, fair, and not misleading.” Moreover, it mandates the firms to provide prominent risk warnings to UK consumers.
However, according to the FCA, some crypto entities, including KuCoin and HTX (Huobi), didn’t comply with the new regulations. Consequently, the agency listed them as “unauthorized firms.” In a letter, Lucy Castledine, Director of Consumer Investments at the FCA, stated that they would take “robust actions” against the illegal promotions.
“Promotions that are not made using one of these routes will be in breach of section 21 of the Financial Services and Markets Act 2000 (FSMA), which is a criminal offence punishable by up to 2 years imprisonment, an unlimited fine, or both,” Castledine stated.
Read more: Crypto Regulation: What Are the Benefits and Drawbacks?
She also emphasized that the FCA will take a tough stance against whoever is carrying out illegal activities. It would delete websites, social media accounts, applications, or other promotional media that require handling.
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