Too many young people invest in crypto.

That’s according to Nikhil Rathi, chief executive of the UK’s Financial Conduct Authority, who made his view known during a meeting with lawmakers on Tuesday.

The boss of the leading financial markets watchdog said they estimate “several millions” of people in the UK under the age of 35 have invested in digital assets without understanding the risks.

“We know it’s potentially very high-risk and you could lose all of your money,” Rathi said.

The FCA would rather that young people invest in equity, bond or other more traditional markets.

On Tuesday, the regulator said helping consumers invest more in equity or bond markets to achieve higher long-term returns was one of its four key objectives in its new five-year strategy, the Financial Times reported.

The comments come as the $84 trillion wealth transfer from older generations to younger ones is expected to be a massive boon for crypto.

Millennial boom

A majority of millennial investors are betting their money on crypto, according to an October survey from investment bank Charles Schwab.

When asked where they would invest their money in 2025, 62% of millennials surveyed said they would invest in cryptocurrencies. American stocks and fixed-income assets were second and third, respectively.

Older generations were more likely to firstly invest in American stocks before investing in crypto exchange-traded funds, according to the survey.

‘Not anti-innovation’

The FCA has gained a reputation as treating crypto too strictly, especially compared to other regulators in jurisdictions like the US where the laws around the industry are becoming more relaxed.

In 2023, the FCA expanded its rules on how financial firms are allowed to market themselves. The strict rules saw firms like PayPal and Binance suspend their UK services.

The regulator has also rejected the majority of businesses that have applied to be registered as a crypto firm in the UK.

“We are not anti-innovation,” Rathi said. “We absolutely want to make sure the UK is an attractive place.”

However, he continued, 86% of the applications were refused because they did not meet anti-money laundering standards that the UK parliament had given the FCA.

This meant that it had to hold back “approvals of some of the largest firms in the world,” which earned the FCA a lot of flak.

“We had a job to do, and some of those things went badly wrong elsewhere, and we didn’t allow that to happen here,” Rathi said.

In December, the FCA released its roadmap for crypto regulation, which calls for the agency to outline its full policy statements, including approaches to crypto staking and market abuse, in 2025.

Andrew Flanagan is a markets correspondent for Inside Solana. Eric Johansson is the news editor for Inside Solana. Have a tip? Reach out to aflanagan@dlnews.com and eric@dlnews.com.