Multiple businesses are under the microscope, as the UK’s financial watchdog closes in on enterprises reported to be operating illegally within the crypto marketplace, according to the countries regulation laws.
The United Kingdom a place of tea and crumpets, knights and castles. A country of old buildings, famed poets, scholars and authors that write about magic school kids. It’s also a country that has a Bulldog as its markets watchdog and financial regulator…and it’s just been let off the chain! The FCA (Financial Conduct Authority) has confirmed there are currently 24 pending investigations into cryptocurrency businesses.
The FCA stated earlier this year that several reports were already being prepared in relation to cryptocurrency businesses and that they were investigating into a further 24 unauthorized enterprises active in the cryptocurrency space. The FCA is investigating into whether these businesses have been engaged in regulated activities without proper authorization.
The FCA required businesses that operate within the cryptocurrency space to meet authorized regulated requirements, stating that refusal to comply would constitute a criminal offense. However, they did want to stress, that not all cryptocurrency assets did fall within their regulatory scope.
The FCA last month revealed in their 2018/19 Business plan (chapter 4, page 27), they stated: “Cryptocurrencies has been an area of increasing interest for markets and regulators globally”. They also noted that while cryptocurrencies currently don’t fall directly under their regulatory perimeter, they made clear that some models of use or packaging bring them within their scope, making the landscape complex.
The FCA has confirmed they would release a report on the regulators take on what policies should be applied to cryptocurrencies and businesses operating within the space later this year and stated “We will work with the Bank of England and the Treasury as part of a task force to develop thinking and publish a Discussion Paper later this year outlining our policy thinking on cryptocurrencies”
In March earlier this year, the British government established the ‘Cryptoassets Task Force’ which consists of the FCA, Her Majesty’s Treasury and the central Bank of England. Their purpose is to explore and analyse cryptocurrencies for both benefit and risk, as stated by the Honourable Philip Hammond, UK Chancellor of the Exchequer in March. This task force will help the UK’s Fintech sector to grow, which has been a keen supporter of blockchain technology and cryptocurrencies.
As John Griffith-Jones, the FCA chairman said back in early March. Cryptocurrencies left unregulated, could potentially harm consumers. The FCA has said they will attempt to advise consumers on its website about certain firms, activities or individuals and wanted to make clear that they could initiate civil action to freeze assets and halt operations.
So where does that leave the average investor, well these regulations are designed to keep the average investor from straying into potentially risky situations and while this level of regulation might seem overkill to many, sometimes to weed out the dishonest you need to crack down and release the dogs.