The Financial Conduct Authority has urged consumers to do their research and assess the risks when dealing with cryptocurrencies.


The UK Financial Conduct Authority (FCA) issued a consumer warning about the risks of investing in cryptocurrency today. But it wasn’t scaremongering, instead, it was an acknowledgment of the risks that do exist in the industry.

In its warning, the FCA listed five main risks and concerns associated with “high-return investments based on cryptoassets,” including consumer protection, price volatility, product complexity, charges and fees, and marketing materials.

Firstly, the FCA reminded the general public that some digital assets—including the ones promising high returns—may not be regulated beyond anti-money laundering requirements. This implies that consumer safety is not guaranteed—like it’s often the case in the world of crypto.

“Significant price volatility in cryptoassets, combined with the inherent difficulties of valuing cryptoassets reliably, places consumers at a high risk of losses,” the regulator continued.

With Bitcoin losing nearly 20% of its price today, it’s hard to argue.

The FCA pointed out that there is a high amount of risk involved with cryptocurrency—which is well known due to the number of scams, hacks, mistakes and experimental technology involved in the industry.

“Investing in cryptoassets, or investments and lending linked to them, generally involves taking very high risks with investors’ money. If consumers invest in these types of product, they should be prepared to lose all their money,” said the regulator’s warning.

The FCA noted that digital assets are oftentimes complex technical products and it can be hard for consumers to figure out all their underlying intricacies. There is also no guarantee that any given crypto can be converted—at least easily—back into cash since it depends on their supply and demand, the regulator added.

Finally, various charges and fees may be not evident at first glance while marketing materials that accompany some digital assets could be over-embellishing.

“Consumers should be aware of the risks and fully consider whether investing in high-return investments based on cryptoassets is appropriate for them. They should check and carefully consider the cryptoasset business involved,” the FCA concluded.

In summary, do your research, consider the risks, and understand that the technology is experimental. And don’t mortgage your house to buy at the next all-time high.

The cryptocurrency market continues to go strong after Thursday’s action-packed rally in Bitcoin (BTC) and Ethereum (ETH). As these two crypto giants are taking a momentary break and consolidating, XRP has taken the charge surging 5.7% trading at $0.59 at press time.

Besides, there have been other interesting developments as institutional actions continue ahead. Here are the top three stories today in Crypto.

Crypto Exchange Coinbase Files for An IPO With the U.S. SEC.
Central Banks closely watch the developments as Bahamas Rolls-out Its Own Digital Currency ‘Sand Dollar’
Christopher Woods, head of equities at Jefferies trims his gold exposure in favor of Bitcoin (BTC)
Coinbase Files for an IPO With the U.S. SEC
Earlier today, cryptocurrency exchange Coinbase submitted the draft registration to the U.S. Securities and Exchange Commission (SEC) for an initial public offering. The announcement comes just at a time when Bitcoin (BTC) has been smashing past new records every day.

Launched in 2012, Coinbase now has over 35 million people across 100 countries trading in crypto. The exchange has more than $300 billion in total traded volumes with over $25 billion worth of assets on the platform. As per Messari researcher Mira Christanto, Coinbase can seek a valuation anywhere close to $28 billion.

Messari’s prediction of Coinbase valuations comes considering all factors like custody fees, trading fees, and other criteria. Well, if the valuations turn out to be true, this could be one of the biggest IPOs beating tech and financial giants like Visa and Facebook.

Central Banks Closely Watch The Developments As Bahamas’ Sand Dollar Goes Live
Bahamas central bank digital currency (CBDC) Sand Dollar is now live as the entire population of 390,000 can use it to make payments across the country. Transaction for the Sand Dollar happens through a native application. Speaking to Reuters, Dawn Sands, owner of NRG – a cafe in Nassau – explained the first-hand experience of using the Sand Dollar. Sands said:

“It’s instant – I get a message, and it’s received. Once people get comfortable and educated, I think it’s going to be big.”

While The Bahamas is a very small country, the Reuters report suggests that the world’s top central banks are closely watching these developments. This includes the U.S. Federal Reserve, Bank of England, the European Central Bank, and the People’s Bank of China (PBoC). All of the central banks have been working on the CBDC at different scales.

A man from Northborough, Mass., has pleaded guilty to involvement in scams that reaped over $600,000 by targeting the elderly and vulnerable.

Making the plea at the federal court in Worcester, Mass., Austin Nedved also acknowledged laundering the proceeds of such schemes via peer-to-peer cryptocurrency exchanges, and other crimes.


In a news release from the U.S. Department of Justice, the Massachusetts Attorney's Office said Nedved admitted running a business buying and selling cryptocurrencies, including bitcoin (BTC, -12.04%), on LocalBitcoins.com and Paxful.com.


From around 2017 to 2019, he worked for romance and lottery scams targeting "vulnerable victims."


"Despite knowing or being willfully blind to the fact that his customers were fraud victims, Nedved sold bitcoin to them so that they could send money overseas to the fraudsters," according to the release.


In romance schemes, victims are persuaded to send money abroad to individuals that purport to be romantic interests, while lottery schemes trick victims into thinking they can obtain lottery winnings or government grants by sending funds for administrative fees or expenses.


In one case, Nedved helped a 78-year-old victim send bitcoin to a fake marriage prospect going by the name “Jonathan G.” who said his oil business needed money amid a crisis.


On June 25, 2018, the victim met Nedved in a parking lot and gave him a cashier’s check to purchase around $100,000 in bitcoin. Days later, Nedved and a co-conspirator took another $40,000 from the victim.


In total, Nedved and his co-conspirators converted over $630,000 of victims' cash into bitcoin, knowing that the funds were the proceeds of scams and other unlawful activities, per the DOJ release.


While in some cases bitcoin was returned to the providers of the cash, in others it was sent on to "unidentified third parties."


Nedved was charged with aiding and abetting wire fraud and money laundering conspiracy, both of which bring maximum sentences of 20 years in prison, plus fines.


The case is another reminder to take extreme care and carry out due diligence when handing over funds for cryptocurrency purchases or investments.

Privacy-focused messaging app Signal takes the lead after being endorsed by Elon Musk, Edward Snowden, and other famous figures.

A recent endorsement by Tesla CEO Elon Musk has propelled privacy-focused messaging app Signal to the very top of major app charts—partly thanks to WhatsApp’s recent controversial announcement.

“Use Signal,” Musk tweeted on January 7—a day after Facebook-owned WhatsApp, one of Signal’s competitors, began pressuring its users to share their personal data with its parent social media.

According to app analytics platform App Annie, Signal is currently the most popular free app on both AppStore and Google Play. WhatsApp, on the other hand, is ranked 13 on iOS and 27 on Android.

Signal is known for using an end-to-end encryption (E2EE) protocol. In cryptography, this method is used to establish a communication channel between two parties that is impossible to “eavesdrop” on.

In E2EE, special encryption keys are created on a sender’s device, which only the recipient is able to decode. This means that data is protected not only from hackers and other malicious actors but from the Internet, server, and service providers as well. While the message itself can be intercepted and copied, it cannot be decoded without the appropriate keys.

“I trust Signal because it’s well built, but more importantly, because of how it’s built: open source, peer reviewed, and funded entirely by grants and donations. A refreshing model for how critical services should be built,” Twitter CEO Jack Dorsey said in the past.

After WhatsApp’s announcement, Edward Snowden, America’s most notorious whistleblower, also confessed that he is using Signal every day—and still hasn't died from it.

“Here's a reason: I use it every day and I'm not dead yet,” Snowden said in a reply to a user asking whether Signal can really be trusted.

As Decrypt reported, demand for Signal exploded following the surge of protests in the US this summer. At the time, the app just entered into the top 10 apps in the “Social Networking” category on iOS.

Today, it’s the number one overall.

Intercontinental Exchange-backed Bakkt will go public around three years after it was first launched.

Bitcoin custodian Bakkt will become a publicly traded company, according to an announcement today. The company will be valued at $2.1 billion.

Bakkt is merging with VPC Impact Acquisition Holdings in a deal that will result in a combined company called Bakkt Holdings, which will be listed on the New York Stock Exchange.

The company also stated that it is already working with Starbucks to enable customers to reload their Starbucks Cards. Bakkt currently supports over 30 loyalty program sponsors and over 200 gift card merchants. The firm plans to widely roll out the Bakkt App in March.

Bakkt hires new CEO
Gavin Michael, former head of technology at Citi’s Global Consumer Bank, also joined Bakkt as CEO today.

Michael succeeds David Clifton, who served as Bakkt’s interim CEO and who will now join the combined company’s board of directors. Michael also headed the digital team for Chase, and served as chief technology innovation officer at Accenture.

“I’m excited to join the management team of a company, at this important time in its expansion, whose vision is to bring trust and transparency to digital assets through innovation and technology,” Michael said.

Bitcoin bulls were celebrating its surge past $40,000 when the inevitable happened.

After reaching all-time high after all-time high, Bitcoin’s price was in dire need of a correction.

“Bitcoin’s parabolic rise is unsustainable in the near term. Vulnerable to setback,” tweeted Scott Minerd, global chief investment officer at investment giant Guggenheim Partners, at about 5am UTC on Monday morning, as Bitcoin’s price began to fall.

He wasn’t wrong.

Over the last 24 hours, Bitcoin’s price fell $9,000, hitting a low of $32,000. At one point, its price fell $3,000 in under two hours. This extreme price volatility upturned a lot of futures traders, liquidating $1.1 billion in long positions. And in real dollar terms, today’s losses represent the biggest Bitcoin crash ever. But what caused this sudden downturn? And what will happen next?

A sudden market correction
Price corrections have simply been part and parcel of bull runs in the past, and today’s price action is no different.

“This Bitcoin price drop should not seem unusual to anybody who has been following the space since the 2017 boom,” Dmitrii Ushakov, chief commercial officer at BitRiver, told Decrypt.

During 2017’s Christmas bull run, Bitcoin reached what was then an all-time high. On the way, we saw dips similar to what has happened today. For example, between November 9, 2017 and November 13, 2017, Bitcoin’s price dropped 20% between $7,459 and $5,950.

Jason Deane, Bitcoin analyst at Quantum Economics, told Decrypt that price corrections are “a healthy part of a bull market and allow traders to regroup and catch their breath before embarking on new price discovery,”

Deane added that, “In times of emotionally fuelled trading, like the 2017/18 boom, these corrections can be large and unpredictable.”

But knowing that price corrections happen hasn’t stopped some Bitcoin holders from selling their assets.

Small investors selling their Bitcoin
Despite many in the crypto industry calling for calm, Bitcoin’s decreasing price has led to small holders selling off their Bitcoin.

This can be explained, in part, by small holders searching for short-term profit, or cutting their losses before witnessing what they might expect to be an even greater market crash.

“Profit-taking once Bitcoin passed $40,000 triggered small investors who are, understandably, more prone to panic (and excitement) and resort to selling faster,” Antoni Trenchev, co-founder and managing partner of Nexo, told Decrypt.

Kain Warick, founder at derivatives liquidity protocol Synthetix, addressed those who might be looking to sell their Bitcoin for fear of a greater price drop in the near future.

While smaller Bitcoin holders might be more prone to react to the market, those holding large amounts of Bitcoin are more willing to hold on to their assets in the long term.