“We’ve noticed a steep increase in “crypto asset losses” being put forward as the main reason for personal insolvency by individuals in financial difficulty.” Andrew Bowers of Re10 Insolvency Practitioners commented.
Many retail investors have lost substantial sums over the last 12 months on the falling value of crypto assets. The massive failures of stablecoin, Terra Luna, and exchanges such as Celsius, Genesis, Alameda, FTX, Blockfi etc have left investors high and dry. Much of this is going completely unreported in the UK.
Individuals can also be caught out by the volatility of crypto assets, and many are losing more than they can afford by using margin trading which is effectively a form of high risk gambling with leverage giving rise to increased exposure.
“It doesn’t take much for a large crypto asset loss to make someone insolvent.”
The UK cryptocurrency market is increasing, with 2.5 million people having purchased crypto-assets according to the FCA. The ease of access to trading apps make it easy for anyone to invest in alt coins, the vast majority of which have a habit of going down in value to £ zero.
Lots of people were drawn into the marketplace during lockdown. They invested and gambled as a form of “hopium” and entertainment. But most investors have lost substantial sums of money.
“Day trading and leveraging in crypto assets frequently ends in debt and eventually insolvency. The trend is expected to continue.”
Andrew Bowers is a licensed insolvency practitioner and an expert finding solutions for people in debt. This frequently involves crypto asset tracing, recovery and security.
Speak to one of our friendly and professional advisors and tell us about your circumstances. We can then discuss what debt solutions are available to your needs and what the pros and cons of each one is. There are many debt solutions available whether that by an informal Debt Management Plan or a more formal Individual Voluntary Arrangement (IVA) through to Bankruptcy or an Debt Relief Order (DRO).
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