I am a small retail buyer/holder of Bitcoin.
In June 2023 the FCA released this Policy Statement https://www.fca.org.uk/publication/policy/ps23-6.pdf
My question relates to the ‘client categorisation requirements’.
Recently, on a platform I use to buy crypto, I had to answer some questions so that they could categorise me (according to the above-mentioned policy it would appear) as either a ‘High Net Worth Investor’ OR a ‘Restricted Investor’.
From what I understand:
A High Net Worth Investor earns £100,000 or more per year, or has net assets worth £250,000 or more.
A Restricted Investor has limited investment exposure, not investing more than 10% in high-risk assets in the past 12 months and not planning to invest more than 10% of their net assets* into high risk assets in the next 12 months.
*Net assets do not include primary residence, pension (or any pension withdrawals) or any rights under qualifying contracts of insurance. High-risk investments include peer-to-peer loans, investment-based crowdfunding, units in a long-term asset fund, unlisted debt and equity (such as in companies not listed on an exchange like the London Stock Exchange), and cryptoassets.
And if I am not in either of these 2 categories, then I cannot buy or trade crypto assets on the platform (but can still sell crypto for cash, withdraw cash, or send crypto to an external wallet).
I am certainly not a High Net worth individual.
So if have no assets other than Bitcoin I may no longer buy Bitcoin?
This seems rather draconian. Who are they to tell me what proportion of Bitcoin is acceptable? (Oh, but if you are already rich, then its fine. More regulation to make sure ‘the rich get richer and the poor get poorer’. I can’t help but feel this is more to protect traditional investment markets than to protect me. I know the risks of Bitcoin and I am prepared to take them.)
Any advice or comments on this would be appreciated.
