Knowledge Hub
Risks of Dealing with Unregulated Entities
Offshore or unlicensed platforms may appear attractive, but can carry materially greater risk and offer limited avenues for recourse.
Some digital asset providers operate outside local regulatory frameworks. If a provider is unlicensed or based offshore, the protections available to customers may be materially weaker and recovering assets can be difficult if something goes wrong.
Unregulated providers may not be subject to the same requirements around anti-money laundering controls, cybersecurity, safeguarding or customer protection that apply to regulated institutions.
Key points to remember
Check a provider's licensing status and reputation before using its services.
Prefer regulated providers operating under recognised supervisory frameworks.
Be cautious of unusually high returns, aggressive promotions and hype-driven recommendations.
Understand your own risk tolerance and only commit funds you can afford to lose.