Consumer protection, and where it stops
- Author
- CRYPTO PORT Editorial
- Published
- Updated
- Reading time
- 6 min
In short
Using a registered provider matters: it puts the relationship inside a framework of disclosure duties and segregation of customer assets. But crypto transactions carry no cooling-off right, and no one compensates you for a fall in price. Use an unregistered operator and you fall outside even that minimum framework.
Key points
- Registered providers owe disclosure duties and must segregate customer assets
- There is no cooling-off right for crypto transactions
- No one compensates a loss caused by prices falling
- Deal with an unregistered operator and you are left with almost no route to a refund
Definition
What the system does and does not do for crypto users: the duties placed on registered providers, the absence of a cooling-off right, and the absence of any loss compensation.
The point of a registered provider is that you are dealing with someone who owes duties: to explain risks, to advertise within rules, to hold customer assets separately from its own, and to maintain a complaints channel. When something goes wrong, knowing where to take it is a meaningful practical difference.
The framework has hard limits, though. First, there is no cooling-off right. The mechanism that lets you unwind certain contracts within a set period does not extend to buying crypto. Having bought, you cannot simply hand it back for your money. Second, a loss from falling prices is outside protection entirely — not as an oversight, but because volatility is inherent to the asset.
Dealing with an unregistered operator puts you outside even that minimum. An exchange recommended by someone met through social media or a dating app, a site operating in Japanese but absent from the FSA's list — assets sent to these are usually not recovered. Often there is no identifiable entity or address to claim against in the first place.
A pattern reported repeatedly in consumer complaints: when you try to withdraw, you are asked to deposit more, described as tax or as a deposit against the withdrawal. Paying it does not produce a withdrawal. The moment something feels wrong, stop sending and take it to a consumer affairs centre or the police consultation line.
Watch out for
- · There is no cooling-off right when buying crypto
- · Being asked to deposit more in order to withdraw is a fraud pattern — stop there
- · Avoid any provider absent from the Financial Services Agency's register
Frequently asked questions
If I was tricked into sending funds, can I get them back?
On-chain transfers cannot be reversed, so in most cases the answer is no. Even so, report it promptly to the police and a consumer affairs centre and notify any provider involved, to limit further damage.