London advisory firm explores the financial risks of cryptocurrency investment

Losses through cryptocurrency speculation are now leading to personal insolvencies in the UK, says international audit, tax, and advisory firm Mazars.

Mazars, whose UK head office is located in the capital, explains they have seen a steep rise in “cryptocurrency losses” written down as a primary reason for personal insolvency on reports being sent to creditors of those bankrupt.

The cryptocurrency market in the UK is significant, with 2.5m people having purchased crypto assets.

Mazars explains that the simplification of trading apps has increased ease of access for buyers allowing more traders to join the market which can drive the price up until there is a market correction.

Paul Rouse, partner at Mazars, commented: “Amateur traders can be caught out by the volatility of cryptocurrencies and in some cases they are losing more than they can afford to.

“Cryptocurrency trading in the UK is now widespread enough that we are beginning to notice it in the files that we are receiving on individual insolvencies, six months ago we hadn’t seen any.

“It often follows a pattern where the amateur trader is successful in their initial small trades and then starts betting bigger and bigger positions until they are caught out.”