The UK's financial watchdog is stepping up its scrutiny of the cryptocurrency sector, even as prices continue to regain their position, over last week's bloodbath, which saw the total market cap for cryptos shed almost 80 percent of its value. According to a Telegraph Money report…
The UK’s financial watchdog is stepping up its scrutiny of the cryptocurrency sector, even as prices continue to regain their position, over last week’s bloodbath, which saw the total market cap for cryptos shed almost 80 percent of its value.
According to a Telegraph Money report published on the Telegraph UK, the number of businesses being investigated by the Financial Conduct Authority (FCA) for running non-complaint businesses operations in the crypto sector has doubled. The financial regulator told the news agency that over 50 firms had been scrutinized this year alone, with only 24 firms looked into at the same period in 2017.
Concerned employees of the affected crypto businesses have also been sending anonymous tips to the agency, which was non-existent three years ago.
Cryptocurrencies were the toast of investors this time last year, as they were being used for speculative purposes, leading to an insane bullish run that made prices too good an opportunity to miss. 2018 has seen little growth and more decline. Just last week, the price of bitcoin dipped to as low as $3,456, making it the first time it fell below $4,000 in over ten months. These losses have not been helped by the reduction in trade volumes and the huge selloffs from scared investors.
The Telegraph quoted Andrew Jacobs, a partner at accountancy firm Moore Stephens who argued that the falling prices would have “triggered a rash of complaints to the FCA.”
“Now that prices have collapsed, fraud is likely to be exposed, with greater pressure coming to bear on the FCA to ensure that this market can operate transparently and fairly.”
Digital assets are still largely unregulated in the UK, but the FCA has made its intention to regulate the industry known in the past. FCA Board Member and Director of Strategy and Competition Christopher Woolard had stated last week at The Regulation of Cryptocurrencies event, in London:
“We’re concerned that retail consumers are being sold complex, volatile and often leveraged derivatives products based on exchange tokens with underlying market integrity issues.”
Going further, the FCA director sees a ban on the sale of derivatives to retail consumers, happening soon. He went on to explain that crypto assets could harm the consumers, market integrity and the financial stability of the UK market, if not nipped in the bud.
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Last modified: January 24, 2020 10:54 PM UTC