UK’s Financial Regulator Eyes 50 Firms on Suspicions of Non-Compliance
The financial regulator of the UK has increased the number of cryptocurrency-related companies it is investigating over “unlicensed operation” to 50. This news is according to reports in The Telegraph, a local daily news outlet.
The UK’s Financial Conduct Authority (FCA), which responded to a Freedom of Information request by the news outlet, stated that it is presently inspecting 50 businesses, which are “suspected” to have offered financial services without the approval of the FCA.
This number is more than double of that reported in May this year by the FCA. It is also coming at a time when the UK is looking for ways to “adopt a more orderly approach to its domestic cryptocurrency industry.” The Telegraph, which did not quote the response itself, nevertheless, made reference to an accountant who suggested that the recent actions by the FCA could be as a result of the indirect pressure placed on the organization because of the downward spiral of cryptocurrencies.
Andrew Jacobs, Moore Stephens’ partner, was quoted by The Telegraph as stating that: “The huge sums list as a result of cryptocurrency prices falling thus 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.”
Thanks to the spate of fraudulent activities taking place in the crypto market, the FCA had recently announced that it intended to “adopt a heavy-handed approach to cryptocurrency as it appears in the financial services industry.”
Part of the actions it has taken includes discussing a ban on specific types of financial products. However, there are fears that this ban could extend to Bitcoin futures and other similar instruments that have been operating successfully elsewhere.
“We are concerned that retail consumers are being sold complex, volatile, and often leveraged derivatives products based on exchange tokens with underlying market integrity issues.” Christopher Woolard, the FCA Executive Director of Strategy and Competition said in a speech given last week.
Critics of this approach have dismissed it as a “blunt instrument approach.” Thanks to the current downturn in the prices of cryptocurrency, the FCA has not felt the need to hastily introduce new rules for the industry.
Fifty cryptocurrency-related businesses are currently under investigation by the UK’s financial regulator, the FCA, on suspicions of offering financial services without any approval from the institution. This number is more than twice the figure reported by the FCA in May this year.
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