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Due to the potential for losses, the Financial Conduct Authority (FCA) considers this investment to be high risk.
Approved by Archax 19/12/2025
Estimated reading time: 2 min
What are the key risks?
1. You could lose all the money you invest
The performance of most crypto assets 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 crypto asset exchange traded notes.
The crypto asset market is largely unregulated. There is a risk of losing money 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 investment because it’s not a type of investment 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. Crypto asset investments can be complex
Investments in crypto asset-linked products 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.
4. Don’t put all your eggs in one basket
Putting all your money into a single type of investment is risky. Spreading your money across different investments makes you less dependent on any one to do well.
A good rule of thumb is not to invest more than 10% of your money in high-risk investments. Learn more here.
Additional product-specific risks
These products are backed by crypto assets that serve as collateral. The value of your investment depends on the value and recoverability of those crypto assets, and on how closely the product tracks their price. If the underlying crypto assets cannot be recovered, or are worth less than expected, you could lose some or all of your money.
You could lose money if the collateral:
Drops in value or becomes hard to sell because of market volatility or a lack of buyers. Becomes inaccessible if a custodian, broker, or other third party that holds or manages the crypto assets fails, is hacked or experiences major technical problems. Is stolen or lost through fraud, cyber-attacks, or blockchain failures that prevent recovery.
Is used for staking to earn rewards on blockchain networks. Staked crypto assets can be locked for periods and may be lost if the network or provider fails, is hacked or penalised (“slashing”), delaying or reducing what you get back.
Cannot be replaced or recovered — the issuer is not responsible for replacing missing crypto assets, so you may not receive the full value of your investment.
In addition, the underlying crypto asset collateral could be affected by:
Operational and technology risks: these products depend on other firms, such as custodians and trading partners. If one of these firms fails, is hacked or suffers a major system issue, the crypto assets backing your investment could be lost or frozen.
Product change or early redemption risks: the issuer can change product terms or end the product early, even in poor market conditions. This could affect its value, and you may get back less than you invested.
