The Financial Conduct Authority (FCA) is beginning to get really serious with companies operating in the cryptocurrency space. According to a report by The Telegraph, the financial regulator has doubled the amount of crypto entities it is investigating, now taking a hard look at 50 to determine if they’re complying with regulations.
The FCA chose these particularly companies because it believes that they are providing financial services without permission. This past May, the regulatory agency was investigating less than 25 and the extended oversight is a measure designed to provide a cleaner cryptocurrency industry in the UK.
The FCA could be feeling pressure to act against more companies due to the current market slide. According to Andrew Jacobs, a partner at the Moore Stephens accounting firm, “The huge sums lost as a result of cryptocurrency prices falling this year will have triggered a rash of complaints to the FCA…Now that prices have collapsed, fraud is likely to be exposed, with greater pressure coming to bear on the FCA to ensure that this market can operate transparently and fairly.”
The FCA has previously asserted that it would take a stronger approach to cryptocurrency. It is said to also be considering a ban on certain crypto products, which may include futures. Cryptocurrency is currently unregulated in the UK, but the FCA, alongside the Bank of England and the Treasury, have created a “cryptoassets task force” that monitors crypto’s impact on the financial system.
The UK government is pushing for tighter regulations of the cryptocurrency space. Parliamentary members want to get past the “Wild West” atmosphere, which can only happen through increased regulations and oversight. According to a report by the Treasury department from two months ago, “Crypto-assets have been embedded in certain pockets of society and industry, and it is highly likely that they are here to stay. The UK Government and financial services regulators appear to be deciding whether they will allow the current ‘Wild West’ situation to continue, or whether they are going to introduce regulation. The current ambiguity surrounding the Government’s and the regulators’ positions is clearly not sustainable.”
Last week, FCA’s executive director of strategy and competition, Christopher Woolard, stated, “We’re concerned that retail consumers are being sold complex, volatile and often leveraged derivatives products based on exchange tokens with underlying market integrity issues.”
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