FCA Addresses 1,400 Cases of Unregulated Crypto Activity

London, United Kingdom - The Financial Conduct Authority (FCA) of the United Kingdom has revealed that it had dealt with 1,400 incidents of unregulated crypto-asset activity from January 2020 to June 2023. This disclosure comes as part of a study from the United Kingdom's National Audit Office (NAO), which examines government expenditures for Parliament. The research, titled “Financial Services Regulation: Adapting to Change,” highlights the problems created by the constantly changing financial services market.

The FCA, as the regulatory watchdog, has embarked on the task of overseeing cryptocurrency-related firms since January 2020, chiefly through the lens of money laundering regulations. This means that any firm involved in currency-to-crypto or crypto-to-currency exchanges, or those safeguarding crypto assets within the UK, must undergo registration and adhere to FCA's supervision. Existing firms were required to complete their registration by January 2021, whereas new entrants must do so before they commence their operations.

According to the NAO report, which operates independently of the government and civil service, during the period from 2020 to 2021, the FCA evaluated 158 applications for registration. Unfortunately, only 29 of these firms received approval, while the rest faced withdrawal, refusal, or rejection. To accommodate those firms still awaiting approval, the FCA implemented a temporary registration regime, allowing them to operate past the initial deadline. By March 2022, all pending cases had been resolved.

Interestingly, despite the FCA's commitment to enforcing anti-money laundering regulations since January 2020 and initiating supervisory work, it wasn't until February 2023 that the regulator began taking enforcement actions against illegal operators of cryptocurrency ATMs.

The NAO report sheds light on a crucial aspect of regulatory work. “There can be a significant delay between the FCA identifying an issue to tackle, and it taking regulatory action,” the report explained. This delay is attributed to the need for specialized skills in the crypto domain. The FCA acknowledges the importance of maintaining a team with the expertise required to handle cryptocurrency-related matters efficiently.

In the words of the report, “The FCA is aware it needs to maintain specialist skills to avoid causing delays in its work — for example, a shortage of crypto skills meant the FCA took longer than planned to register crypto-asset firms under money laundering regulations.”

Furthermore, the FCA is on the lookout for businesses that violate financial promotion restrictions. According to the article, the FCA has formed a specialized team to target high-risk and illicit financial marketing. Surprisingly, the research reveals that there has been a significant increase in recorded crypto-asset frauds, with more than 3,150 cases in 2020, more than 6,300 in 2021, and more than 3,900 in the first half of 2022. To tackle this growing threat, the FCA launched the posting of a public list of unlawful businesses, and more than 300 firms have been warned by the FCA since its beginning.

The FCA's attempts to regulate the volatile crypto industry demonstrate its dedication to protecting the interests of companies and consumers in a climate marked by both innovation and risk. The FCA is committed to keeping ahead of the curve and maintaining the highest degree of regulatory compliance as the cryptocurrency environment evolves.

In conclusion, given the quickly evolving world of Bitcoin, the FCA's research emphasizes the significance of specialized expertise and fast regulatory action. With the number of crypto-related cases rising, regulatory authorities must adapt and equip themselves with the required competence to properly manage developing difficulties.

For more information on the FCA's efforts and the latest developments in the cryptocurrency industry, please visit https://www.wikifx.com/en.

About WikiFX

WikiFX (https://www.wikifx.com/en) is a leading platform that provides comprehensive information about forex brokers and financial markets. With a mission to empower traders with knowledge, WikiFX offers a wide range of resources, including broker reviews, educational articles, and market analysis, to help traders make informed decisions in the world of finance. Visit https://www.wikifx.com/en today to explore a wealth of valuable information and stay updated on the latest developments in the financial industry.