Crypto Payments, Upgraded: Arbitrum, Optimism & Base Now Supported

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Crypto Payments, Upgraded: Arbitrum, Optimism & Base Now Supported

Discover L2 Payments

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Risk Summary

Estimated reading time: 2 min

Due to the potential for losses, the Financial Conduct Authority (FCA) considers this investment to be high risk.

What are the key risks?

  1. You could lose all the money you invest

  • The performance of most cryptoassets can be highly volatile, with their value dropping as quickly as it can rise. You should be prepared to lose all the money you invest in cryptoassets.

  • The cryptoasset market is largely unregulated. There is a risk of losing money or any cryptoassets you purchase due to risks such as cyber-attacks, financial crime and firm failure.

  1. You should not expect to be protected if something goes wrong

  • The Financial Services Compensation Scheme (FSCS) doesn’t protect this type of investment because it’s not a ‘specified investment’ under the UK regulatory regime – in other words, this type of investment isn’t recognised as the sort of investment that the FSCS can protect. Learn more by using the FSCS investment protection checker here.

  • The Financial Ombudsman Service (FOS) will not be able to consider complaints related to this firm. Learn more about FOS protection here.

  1. You may not be able to sell your investment when you want to

  • There is no guarantee that investments in cryptoassets can be easily sold at any given time. The ability to sell a cryptoasset depends on various factors, including the supply and demand in the market at that time. 

  • Operational failings such as technology outages, cyber-attacks and comingling of funds could cause unwanted delay and you may be unable to sell your cryptoassets at the time you want.

  1. Cryptoasset investments can be complex

  • Investments in cryptoassets can be complex, making it difficult to understand the risks associated with the investment. 

  • You should do your own research before investing. If something sounds too good to be true, it probably is.

  1. Don't put all your eggs in one basket

  1. Not all cryptoassets bear the same risks

  • Some cryptoassets may have additional risks specific to the nature of the cryptoasset.

  • Stablecoins

    • May not always maintain a 1:1 peg to their underlying asset, leading to value fluctuations.

    • Their value depends on issuer reserves, regulatory status, and market conditions, amongst other factors.

  • DeFi Tokens

    • Prices are highly volatile and often tied to experimental or unproven protocols.

    • Smart contract vulnerabilities may lead to loss of funds.

  • Memecoins

    • Highly speculative and prone to extreme price swings due to hype and social media trends.

    • Memecoins lack intrinsic utility, making their long-term value uncertain.

  • Staked Assets

    • Lock-up periods may prevent access to funds for a set duration.

    • Slashing penalties could result in the loss of staked funds due to network rules.

  • Loss of keys to non-custodial wallet

    • Losing private keys or recovery phrases means losing access to funds permanently.

    • No third party, including the wallet provider, can recover or restore lost wallets.

For more information about specific asset risks, please read our Asset Risk Summary here.

If you are interested in learning more about how to protect yourself, visit the FCA’s website here. For further information about cryptoassets, visit the FCA’s website here.