FTX logoImage source, Getty Images

The collapse of the FTX exchange could leave over a million people and businesses with money.

There have been reports of a hack at FTX that took millions of dollars of digital currency.

It's a worry for people who have money in the business.

There isn't much protection for consumers in the UK when it comes tocryptocurrencies.

More than 6 million people in the UK own or have bought a piece of digital currency, despite warnings from watchdogs.

The Financial Conduct Authority warned in September that FTX may be providing financial services in the UK without its permission. If things go wrong, you're unlikely to get your money back.

There is a page about the FTX Liquidation. There are limited options for those who have invested in it.

The remains of the firm will be divided between those who owe money and those who don't.

According to a recent report, 4% of exchanges failed without a trace.

The bankruptcy may not be comforting.

The investors are on the hook for losses in the event of exchange failure, according to Prof. Brown.

Many small investors will go to the back of the queue when a business is divided up among its debts.

Money won't come back according to experts. The bad news is that all the money has vanished. It isn't there anymore. David said that investors should expect pennies on the dollar.

A stock image of a troubled investorImage source, Getty Images

There are real liabilities but imaginary assets in many of these failures and a huge proportion of the assets are in exchanges' own token.

Moneyhelper is a government backed organisation that the FCA says people worried about their finances should go to. Moneyhelper only offers guidance on how to survive when your savings are gone.

If an institution collapses, it's possible to get compensation through the Financial Services Compensation Scheme.

Even though they are not a regulated financial product in the UK, the FSCS can only warn consumers of the risks and give them tools to check if their investment is protected.

Every week, consumers ask about it via its customer service team, social media or searching for information on its website.

"Crypto" is one of the most searched for words on the website.

The short answer is that there isn't much recourse, according to Daniel Seely.

Consumers don't have a clear right to recourse in the same way they may with other products due to the fact that the scope of regulators and watchdogs is not as broad as it would be withcryptocurrencies.

If the investments didn't go as planned, consumers could consider pursuing civil claims against parties involved in the investment, such as brokers or financial advisers, but there is currently little they can do to recover losses.

Mr Seely said that it was still a very risky area for consumers to invest in, despite the fact that the Financial Services and Markets Bill would bring in some additional regulation.

There are some steps consumers can take to protect themselves against similar losses in the future, in particular by thinking carefully about where they stored their assets.

Unless they are active traders, we encourage our customers to keep their coins in a non-custodial wallet.

"In the industry, we say not your keys, not your coin." Recent events prove it's true.

Benjamin Dean is the director of WisdomTree Investments, an asset management firm.

He advised against investing more money than you can afford to lose and against investing with companies that operate off-shore exchanges.

If you don't research where you're investing your money, you're running a very high risk of losing all your money.

Rocio Concha is the director of policy and advocacy for Which? If investors decide to buy them, they will lose all their money.

  • Personal finance
  • Cryptocurrency