New research by the FCA has revealed that an estimated 2.6m UK consumers have bought cryptoassets.

The number is a 1.1m rise since this time last year.

Despite the growth, 300,000 wrongly believe they have full regulatory protection in the event of a problem leaving them exposed to “financial harm,” says the regulator.

Of the 1.9m that still hold cryptoassets – such as Bitcoin, Ripple or Ether – half have more than £260. 

The research is part of the FCA’s work with the Government and Bank of England to understand market size, consumer profiles and attitudes towards cryptoassets.

In the March Budget, Chancellor Rishi Sunak announced plans to  consult on whether to bring some cryptoassets into UK financial promotions regulation. 

A policy statement is due this year following a consultation on banning the sale of certain cryptoasset derivatives to retail investors.  

The figures for the latest FCA research are based on a recent study conducted online by YouGov which saw 2,681 participants questioned.

It found:

• The majority of cryptoasset owners were generally “knowledgeable” about cryptoassets, aware of the lack of regulatory protection and understand the risk of price volatility; 
• An estimated 300,000 cryptoasset owners believe they have protection, which leaves them at potential risk of financial harm; 
• Adverts play a key role in influencing cryptoasset consumers’ decisions, with more than a third of respondents saying an advert made them more likely to purchase cryptoassets; 

Of those who buy cryptoassets, 83% do so through non-UK based exchanges, the study found.

The FCA’s interim executive director of strategy and competition, Sheldon Mills, said: “Cryptoassets present risks and opportunities for consumers and we hope these insights will help inform the policy debate in the UK and internationally as the use of these assets continues to grow.”

The FCA has previously warned that cryptoassets are “highly volatile and risky.” Many are not currently regulated in the UK.