(Bloomberg) --

Investors in cryptocurrencies could be cut out of Britain’s compensation program when companies go bust, according to a proposal by the U.K. Financial Conduct Authority.

The regulator said in a discussion paper on Monday that particularly high risk or alternative investments, such as cryptoassets and unlisted securities, could in certain circumstances be excluded from the Financial Services Compensation Scheme. 

The FCA doesn’t authorize most firms selling crypto investments, meaning traders would not have access to compensation anyway, yet the proposals mark a hardening of rhetoric and a fresh sign that crypto is largely operating beyond the grasp of global regulators.

The FSCS protects as much as 85,000 pounds ($112,700) per customer if a firm goes bust. Levies on companies have more than doubled in a decade to 717 million pounds after a series of investment firms failed, and the FCA is looking for ways to reduce the cost. The watchdog is also considering whether high-net worth or sophisticated individuals should be eligible to claim compensation.

Crypto has drawn the attention of regulators globally due to volatile price movements as as well as the complexity of the products and lack of consumer protection.  Bitcoin, the largest cryptocurrency, fell as much as 21% on Saturday before recovering, while the second biggest, Ether, dropped as much as 17% the same day.

Gary Gensler, chair of the Securities and Exchange Commission, warned in August that the cryptocurrency market is “rife with fraud, scams and abuse” and that “a lot of people will be hurt” if the U.S. government doesn’t boost investor protections. The FCA said in November that investors should be prepared to “lose all their money.”

The FCA’s latest suggestions are far from a done deal. The regulator said Monday that any change to exclude crypto could add to confusion about what activities and products are protected. Responses are due by March 4.

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