Due to the potential for losses, the Financial Conduct Authority (FCA) considers the purchase of cryptoassets like MON to be high risk.

What are the key risks?

1. You could lose all the money you use to purchase cryptoassets like MON

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 use to purchase 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.

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

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

Protection from the Financial Ombudsman Service (FOS) does not cover poor investment performance. If you have a complaint against an FCA regulated firm, FOS may be able to consider it. Learn more about FOS protection here.

3. You may not be able to sell your cryptoassets when you want to

There is no guarantee that purchased 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.

4. Cryptoasset purchases can be complex

Purchases of cryptoassets can be complex, making it difficult to understand the risks associated with the activity.

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

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

Putting all your money into a single type of asset is risky. Spreading your money across different assets makes you less dependent on any one to do well.

A good rule of thumb is not to devote more than 10% of your money in high-risk purchases or investments. Learn more 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.