Over a dozen firms in the cryptocurrency sector are under investigation by UK’s financial regulator, reports the Financial Times.
According to the business publication, the Financial Conduct Authority (FCA) disclosed on Sunday that 18 companies were being investigated over their involvement in selling cryptocurrencies. Additionally, alerts and warnings had been sent to another dozen or so firms over suspicion that they were engaging in cryptocurrency investment scams.
However, the FCA has declined to name the firms that are in the spotlight to avoid prejudicing the ongoing investigations. This is also to avoid affecting the business operations of the companies involved negatively before a definite conclusion has been reached.
Late last month, CCN.com reported that the FCA had opened inquiries into 67 firms which were involved in cryptocurrency dealings. The latest information from the FCA now indicates that inquiries on 49 firms were closed, with 39 of those firms being slapped with consumer alerts.
Additionally, ten of the firms had their probes closed after the FCA failed to get enough evidence necessary to advance the cases or since the firms had received warnings informing them they needed authorization in order to continue operations.
As CCN.com reported last month, part of the reason for the increase in the number of probes came after the FCA was flooded with complaints in the wake of falling cryptocurrency prices which had likely exposed fraud in the sector. At the time, the director of strategy and competition at the FCA, Christopher Woolard was quoted as saying that the financial regulator was worried that unsophisticated investors were being sold products which were complex and didn’t pass the “smell test.”
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.
While the downturn in cryptocurrency prices has resulted in more complaints to the FCA and consequently greater pressure, UK’s Ministry of Finance officials had a different take last month noting that the bearish conditions had eased pressure to take radical action.
Then, the financial services deputy director at the UK Ministry of Finance, Gillian Dorner, argued that the downturn in the cryptocurrency market had bought them time and this would assist in coming with constructive policies rather than hasty decisions:
We want to take the time to look at that in a bit more depth and make sure we take a proportionate approach.
Featured Image from Shutterstock
Last modified: May 20, 2020 1:02 PM UTC