On 30th June the FCA published the results of its latest research into how consumers interact with cryptomarkets in the UK. It found that 1.9 million people, or 3.86% of the general adult population (over 18 years), currently own cryptosystems.
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This represents what the agency considers a „statistically significant increase“, up from 3% in the last FCA consumer research report in 2019.
The increase brings the total number of UK consumers who have ever had cryptoactives up from 1.5 million to the current estimated figure of 2.6 million.
Apart from the sharp increase in crypt holders, the industry’s presence seems to be increasing: 73% of adults have heard of crypt coins, compared to 42% last year.
Research indicates that 75% of the 1.9 million crypts in existence today are worth less than £1,000 ($1,229). 83% of crypto-currency holders buy their assets through non-UK-based exchanges.
In general, the level of expertise and understanding of potential risks associated with the lack of protection and volatility of assets by holders is high, according to the regulator.
One exception is that 11% of current and former Bitcoin Up holders mistakenly believe that their crypto assets are covered by consumer protections, which is approximately 300,000 people.
The FCA believes this puts these consumers at risk of financial harm. However, it also found, in parallel, that the most popular reason for consumers to buy cryptosystems was „it’s like a gamble that could make or lose money,“ with full awareness of the volatility of cryptosystems.
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Another key conclusion reached is the apparent predominance of crypto-industry related advertising and its influence on consumer decisions.
Forty-five percent of current and former holders said they had seen some advertisement related to crypts, of which 35% (400,000 people) said it made them more likely to purchase them. In total, 16% of the people consulted said that they had been influenced by the advertising.
The national climate with respect to cryptoindustry
As reported earlier this week, the FCA issued a detailed statement asking all local kryptonex business operators to register with the authority by today. Their latest registration requirements include a number of specific compliance measures, primarily in the areas of money laundering and terrorist financing prevention.
The FCA reminds UK kryptonex businesses to register before the deadline
In its announcement today, the agency said it is working with the Government and the Bank of England as part of the UK Crypt Task Force to address potential risks that consumers may face, while encouraging innovation.
The government budget in March 2020 indicated that it planned to consult on measures to potentially include certain cryptoactives in the scope of financial promotion regulation.