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Due to the potential for losses, the Financial Conduct Authority (FCA) considers investing in cryptoassets through LocalCoinSwap.uk to be high risk.
LocalCoinSwap.uk is a peer-to-peer cryptocurrency marketplace operated by TechHouse Ltd. It provides non-custodial technical infrastructure, including on-chain escrow mechanisms, a trading interface, a non-custodial wallet, and crypto swap tools. LocalCoinSwap does not act as a broker, custodian, exchange, money service business, or payment processor. Cryptocurrency settlement occurs peer-to-peer on-chain between users. Using LocalCoinSwap.uk services — including buying or selling crypto via P2P offers, holding crypto in your wallet, or swapping crypto — involves significant risk of loss.
What are the key risks?
1. You could lose all the money you invest
The performance of most cryptoassets 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 cryptoassets when using LocalCoinSwap.uk, whether you buy or sell through peer-to-peer offers, hold balances in your LocalCoinSwap wallet, or use crypto swap services.
The cryptoasset market is largely unregulated. There is a risk of losing money or any cryptoassets you purchase due to risks such as cyber-attacks, financial crime, and firm failure. Because LocalCoinSwap.uk is non-custodial, you are responsible for securing your private keys and seed phrases. LocalCoinSwap cannot reset, recover, or reissue keys. Loss of access to your keys means permanent loss of your cryptoassets.
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 ‘specified investment’ under the UK regulatory regime – in other words, this type of investment isn’t recognised as the sort of investment that the FSCS can protect. Learn more by using the FSCS investment protection checker.
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.
3. You may not be able to sell your investment when you want to
There is no guarantee that investments in cryptoassets can be easily sold at any given time on LocalCoinSwap.uk. The ability to sell a cryptoasset depends on various factors, including the supply and demand in the peer-to-peer marketplace at that time, available payment methods, and whether other users have matching offers.
Operational failings such as technology outages, cyber-attacks, blockchain network congestion, and comingling of funds could cause unwanted delay and you may be unable to sell your cryptoassets at the time you want. Escrow-protected trades also depend on the other party completing their obligations within the agreed payment window.
4. Cryptoasset investments can be complex
Investments in cryptoassets can be complex, making it difficult to understand the risks associated with the investment. LocalCoinSwap.uk supports a range of cryptocurrencies and payment methods, and peer-to-peer trading involves additional operational risks such as counterparty behaviour, payment disputes, and escrow release timing.
You should do your own research before investing or trading on LocalCoinSwap.uk. If something sounds too good to be true, it probably is.
5. 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 perform well.
A good rule of thumb is not to invest more than 10% of your money in high-risk investments.
5 questions to ask before you invest (FCA)
6. Asset-specific risks
LocalCoinSwap.uk currently supports the cryptoassets listed on the Supported Cryptos page:
- Bitcoin (BTC)
- Litecoin (LTC)
- Ethereum (ETH)
- Tether (USDT) on ERC-20, BEP-20, and TRC-20
- USD Coin (USDC) on ERC-20 and BEP-20
- Dai Stablecoin (DAI) on ERC-20 and BEP-20
- Cryptoshares (LCS) on ERC-20
- Binance Coin (BNB) on BNB Smart Chain
- TRON (TRX)
Each asset and network carries additional risks beyond general market volatility.
Bitcoin (BTC) and Litecoin (LTC)
BTC and LTC prices can move sharply over short periods. Network congestion may increase fees and delay confirmations, which can affect escrow funding, trade completion, and withdrawals. Transactions on these networks are irreversible once confirmed. Sending funds to an incorrect address will usually result in permanent loss.
Ethereum (ETH), Cryptoshares (LCS), and other ERC-20 tokens
ETH, LCS, and ERC-20 versions of USDT, USDC, and DAI depend on the Ethereum network. High gas fees, network congestion, or outages can delay or increase the cost of transfers and escrow interactions. ERC-20 tokens rely on smart contracts, which may contain bugs, be upgraded, paused, or otherwise fail. Always confirm you are using the correct ERC-20 contract and network before sending or receiving tokens.
BNB and BEP-20 tokens
BNB and BEP-20 versions of USDT, USDC, and DAI operate on BNB Smart Chain. They are exposed to network outages, validator or infrastructure issues, and smart-contract vulnerabilities. Sending BEP-20 tokens to an incompatible network or wallet (for example, an ERC-20-only address) can result in permanent loss of funds.
TRON (TRX) and TRC-20 tokens
TRX and TRC-20 USDT operate on the TRON network and are subject to network fees, congestion, and operational risks specific to that chain. TRC-20 tokens rely on smart contracts and can be affected by contract failures or issuer actions. Sending TRC-20 assets to the wrong network or address format can result in irreversible loss.
Stablecoins (USDT, USDC, DAI)
Stablecoins available on LocalCoinSwap.uk may exist on more than one network. These versions are not interchangeable. Selecting the wrong network when depositing, withdrawing, or trading can lead to permanent loss. Stablecoins may also depeg from their intended value, face issuer or collateral risks, and may not maintain a fixed value during periods of market stress.
Network and operational risks across supported assets
Across all supported assets, you may face blockchain forks, protocol changes, wallet software bugs, phishing, and malware targeting private keys. Because LocalCoinSwap.uk is non-custodial, losses from user error, compromised keys, or sending crypto to the wrong network or address generally cannot be reversed by LocalCoinSwap.
7. How to protect yourself
If you are interested in learning more about how to protect yourself when investing in high-risk products, visit the FCA’s InvestSmart website.
On LocalCoinSwap.uk specifically: only trade with funds you can afford to lose; verify payment independently before releasing crypto from escrow; never share your seed phrase or private keys; and complete UK onboarding and any required identity checks before trading.
8. Further information
For further information about cryptoassets, visit the FCA’s website on cryptoassets.
You can also review LocalCoinSwap.uk’s Terms of Service and Privacy Policy for details on how the platform operates.