FCA gets stern, opens investigations against 50 unauthorised crypto firms

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FCA gets stern, opens investigations against 50 unauthorised crypto firms

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 FCA gets stern, opens investigations against 50 unauthorised crypto firms
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Highlights

  • On Thursday, the FCA announced that it is actively investigating more than 300 cases as part of its efforts to crack down on unregistered crypto businesses.
  • Last year, the FCA had raised concerns over the risks around investment in digital currencies, misleading marketing and advertisements by crypto businesses.

The Financial Conduct Authority (FCA) has, of late, tightened its noose around crypto businesses operating in the UK. Since January 2020, it has been urging all crypto businesses to register with them and adhere to the various money laundering, terrorist financing, and transfer of funds regulations of the country.

Last year, the FCA had raised concerns over the risks around investment in digital currencies, the volatility aspect, and misleading marketing and advertisements by crypto businesses. Instead of this, the FCA had even penalised leading crypto exchanges in the country, such as Crypto.com, Kraken, Bybit, etc., for irresponsible marketing. Besides, the UK had barred the world’s leading crypto exchange Binance from operating in the country.

On Thursday, the FCA announced that it is actively investigating more than 300 cases as part of its efforts to crack down on unregistered crypto businesses operating in the country.

Also read: How Uphold can change crypto trading in UK after FCA’s go-ahead

Probes and investigations

The FCA announced that as many as 50 active investigations are on, which indicate that these could be scams in nature. The FCA is studying 300 cases on unregistered crypto firms in the last six months to protect consumer interest.

According to an FCA report, it received about 16,400 inquiries between April and September in 2021 about possible crypto scams. This is more than a third of such inquiries that the FCA had received in the same period in 2020.

The FCA is exploring all possible options for a more assertive supervision and enforcement action. This is expected to make the operation of crypto businesses tougher as they will have now to ensure that they are complying with all regulations in the FCA rulebook.

Also read: Binance once again under FCA scanner following Paysafe deal

Increasing consumer confidence

Sarah Pritchard, Executive Director of Markets, FCA, feels that it is critical to ensure that consumers have confidence while making investments and the need to be careful about scams and scamsters. Therefore, it is critical and crucial to protect them from various scams and make sure that the details are properly vetted by the FCA.

Pritchard added that investors need to do their thorough research before deciding to invest in digital currencies.

Conclusion

While the result of the extensive investigations may take some time, it shows the intent of the FCA to protect consumers’ interests. Consumer protection has been one of the main core focus areas for the FCA, especially when it comes to digital currencies. The FCA would be keeping a tighter vigil on the crypto businesses, their modus operandi, and their business future plans.

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