Recognizing Crypto Risks

Crypto is very risky—go in with your eyes open 

No investment is without risk, but crypto assets are particularly risky. While there’s no guarantee you won’t suffer any losses when speculating, buying, or trading crypto assets, here are some things to consider that may help you avoid loss or fraud.  

Crypto risks 

  • Volatility: Prices of crypto assets are often driven by media or social media hype and can rise and fall quickly and dramatically. 
  • Liquidity: When trading on a crypto asset trading platform, the CTP may not have enough crypto assets to cover your order. There are also no guarantees the demand for any given crypto asset will continue. CTPs may limit or suspend trading, or there may be limitations or suspension imposed on funding and withdrawals from accounts. 
  • Online risk: Crypto asset service providers and intermediaries may exist anywhere in the world. It can be difficult or even impossible to identify or locate the service provider or intermediary and take any action if you have a problem.  
  • Technical and cybersecurity: Technology and platforms used for crypto trading are susceptible to cybersecurity threats and hacking, putting your funds and crypto assets at risk.