7 October 2022
UK Regulator Claims 111 Crypto Companies as a very real risk
United Kingdom’s financial regulator- Financial Conduct Authority (FCA), has cautioned customers against 111 unregistered crypto companies
According to the Financial Conduct Authority’s rule, all the cryptocurrency firms based in the United Kingdom had to comply with Anti-Money Laundering and Counter-Terrorist Financing laws, and register with the FCA to operate legally.
On June 22, Mark Steward, FCA's head of enforcement, asserted at the "City & Financial's City Week" that the unregulated crypto entities pose a threat to consumers, banks, and payments firms who do business with them, noting that: ""We have a number of firms that are clearly doing business in the UK without being registered with us and they are dealing with someone: banks, payment services firm, consumers. This is a very real risk so we are worried about that."
Moreover, the FCA has compiled a list of more than 100 crypto firms that appear to be operating unregistered so that investors can double-check if a firm they intend to deal with is non-compliant. Reportedly, it seems that the financial watchdog is extra vigilant in light of the burgeoning popularity of cryptocurrency in the United Kingdom. As per a recent FCA’s survey 2.3 million, UK adults now hold cryptocurrency.
Steward compared the growth of the crypto industry to the Dutch tulip mania of the 1630s, noting that fear of missing out (FOMO) is driving many to speculate on highly volatile assets. The operational hurdles from the U.K’s stringent anti-money laundering laws may be putting off a lot of these unregistered firms. So far 51 crypto firms have withdrawn their registrations applications to the FCA.
The UK government is actively curbing criminal behaviors like money laundering and terrorism financing. According to The Times UK, earlier this month the London Metro Police called for legislative change that would enable authorities to approach crypto in a similar fashion to cash-based crime.
Disclaimer: The author’s views and opinions are for informational purposes only and do not constitute financial, investment, or other advice.