Britain’s financial services regulator, the Financial Conduct Authority (FCA), said yesterday that 111 unlisted crypto asset companies pose a risk to consumers.
“We have a number of companies that are clearly doing business in the UK without being registered with us and they are dealing with banks, payment services companies and consumers,” said Mark Steward, head of market enforcement and oversight at FCA. .
Steward speaks at City & Financial City’s Week event. He went on to explain that many get involved with crypto for “fear of being left behind,”
FCA’s View on Crypto
Steward’s warnings about unlisted crypto companies and about crypto more generally are in line with the FCA’s broader stance.
In January this year, the FCA imposed a ban on trading in crypto derivatives, describing the product as “unsuitable” for retail customers. The FCA says crypto products lack reliable valuations, display the prevalence of crime and financial volatility, and in any case, retail investors lack the understanding to safely interact with such products.
Five days later, the FCA listed five fully plausible concerns about the crypto industry, with consumer protection topping the list.
In March, the FCA shifted its focus to crypto issues with financial crime, announcing that crypto companies will now be required to submit annual financial crime reports to the FCA, just like the rest of the financial services industry.
“This policy statement proposes that additional companies and cryptoasset businesses should be included in the scope of returns based on their business activity and potential money laundering risk,” the FCA said at the time.
The FCA stance may not find support among crypto veterans, but the concerns are well-founded. In May, the UK’s National Crime Agency released its annual assessment of serious and organized crime.
In the report, the NCA said that “the use of criminal technology is increasing, and the use of crypto assets to launder money has increased in some types of crime,” the NCA said at the time.