UK FCA warns against digital currency platform Markets Pilot

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The United Kingdom’s financial services regulator has warned the public against Markets Pilot, a digital currency trading platform. The Financial Conduct Authority stated that the company hasn’t received the necessary licenses to offer financial services in the country.

“We believe this firm has been providing financial services or products in the U.K. without our authorization,” the regulator claimed in its warning statement.

Markets Pilot claims to be based in the Caribbean island nation of Dominica. It has, however, been targeting U.K. residents with its investment and trading platform, according to the FCA.

“Be aware that scammers may give out other false details or change their contact details over time to new email addresses, telephone numbers or physical addresses,” the watchdog added.

On its website, Markets Pilot describes itself as a “one-stop trading place for any asset in the world of digital currency markets.” It also claims to offer stocks, indices, currencies and commodities, accepting deposits in AUD, EUR, USD and GBP.

The FCA urged investors who had placed their funds with Markets Pilot to report urgently.

Markets Pilots joins a long list of digital currency firms that the watchdog has issued warnings against. The FCA has also taken other steps to protect digital currency investors, the latest being banning the sale of digital currency derivatives to retail investors. According to the regulator, retail clients can’t reliably value these products.

Some of the underlying risk factors the FCA cited included the volatile nature of digital currencies, prevalence of market manipulation, inadequate understanding of digital currencies by retail investors and the lack of a reliable basis for valuation.

Many in the digital currency industry supported the move, viewing it as a necessary cleanup of the industry. One of the supporters is Konstantin Anissimov, the executive director of CEX.IO digital currency exchange. The exchange revealed to CoinGeek in August that it had applied for FCA approval. As it awaits the regulator’s decision, the exchange has been allowed to continue providing services to U.K clients.

Speaking exclusively to CoinGeek, Anissimov stated:

“We support the FCA’s actions with regards to the unregulated derivatives exchanges and, essentially, following through with their promises. As we have already seen what has happened with BitMEX in the US, we believe that there will be a negative effect on the players in the market who ignored and neglected this regulation that has now come into force.”

See also: CoinGeek Live panel on Digital Currency & Compliance: Tools & Tips for Exchanges, Wallets & Other Service Providers